BMW 2009 Annual Report Download - page 96

94
74 Group Financial Statements
74 Income Statements
74 Statement of
Comprehensive Income
76 Balance Sheets
78 Cash Flow Statements
80 Group Statement of Changes
in Equity
81 Notes
81 Accounting Principles
and Policies
90 Notes to the Income
Statement
97
Notes to the Statement
of Comprehensive Income
98 Notes to the Balance Sheet
119 Other Disclosures
133 Segment Information
in euro million 2009 2008
Expected tax expense 124 106
Variances due to different tax rates 38 24
Tax reductions (–) / tax increases (+) as a result of non-taxable income and non-deductible expenses 68 – 49
Tax expense (+) / benefits (–) for prior periods – 26 – 60
Other variances –1 –
Actual tax expense 203 2 1
Deferred taxes are not recognised on retained profits of
euro 15.9 billion (2008: euro 15.6 billion) of foreign sub-
sidiaries, as it is intended to invest these profits to main-
tain
and expand the business volume of the relevant com-
panies. A computation was not made of the potential
impact of income taxes on the grounds of disproportionate
expense.
The tax returns of BMW Group entities are checked regu-
larly by German and foreign tax authorities. Taking account
of a variety of factors – including existing interpretations,
commentaries and legal decisions taken relating to the
Non-deductible expenses include the impact of non-re-
coverable withholding taxes. The item “Tax expense (+) /
benefits (–) for prior periods” includes tax income resulting
from rulings made by the European Court of Justice with
regard to German tax legislation. Working in the opposite
direction, tax expenses incurred for prior years in conjunc-
tion with a tax field audit at the level of BMW AG, mostly
relating to intragroup transfer pricing arrangements, also
had an impact. The resulting threat of a double taxation
charge is being avoided by initiating bilateral appeal
pro-
ceedings.
Corresponding reimbursement claims at the
level of foreign subsidiaries did not fully offset the tax
ex-
pense incurred due to differences in tax rates in the
tax
jurisdictions involved.
various tax jurisdictions and the BMW Group’s past ex-
perience – adequate provision has, as far as identifiable,
been made for potential future tax obligations.
The actual tax expense for the financial year 2009 of euro
203 million (2008: euro 21 million) is euro 79 million higher
(
2008: euro 85 million lower) than the expected tax ex-
pense
of euro 124 million (2008: euro 106 million) which
would theoretically arise if the tax rate of 30.2 % (2008:
30.2 %), applicable for German companies, was applied
across the Group. The difference between the expected
and actual tax expense is attributable to the following:
The item “Other variances” includes the impact of the
reduction in tax expense as a result of utilising tax losses
brought forward for which deferred assets had not pre-
viously been recognised and tax credits, also not pre-
viously recognised, amounting to euro 3 million (2008:
euro 4 million). Moreover, the tax expense was increased
by euro 26 million (2008: reduced by euro 9 million) as
a
result of deferred taxes on previously unrecognised
temporary differences. The tax income for the valuation
allowance on deferred tax assets relating to tax losses
available for carryforward and temporary differences
and their reversal amounted to euro 10 million (2008:
euro – million).