Siemens 2009 Annual Report Download - page 233

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 Managing Board statements, Independent auditors’ report, Additional information
 Notes to Consolidated Financial Statements
(in millions of €, except where otherwise
stated and per share amounts)
For foreign subsidiaries, current taxes are calculated based on
the regulation of the national tax law and using the tax rates
applicable in the individual foreign countries. Deferred tax as-
sets and liabilities are measured at the tax rates that are ex-
pected to apply to the period when the asset is realized or the
liability is settled.
Income tax expense differs from the amounts computed by ap-
plying statutory German income tax rates (31% for fiscal ended
September 30, 2009 and 2008) as follows:
In fiscal 2009 the tax effect of non-deductible losses and ex-
penses is mainly impacted by the impairment of NSN and in
fiscal 2008 by estimated fines in connection with then ongo-
ing settlement negotiations of legal matters with authorities
in the U.S. (settled in fiscal 2009).
Income tax expense (benefit) consists of the following:
The current income tax expense in fiscal 2009 and 2008 in-
cludes adjustments recognized for current tax of prior periods
in the amount of €(11) and €(58), respectively.
Of the deferred tax benefit in fiscal 2009 and 2008, €(177) and
€(52), respectively, relate to the origination and reversal of
temporary differences.
In Germany, the calculation of current tax is based on a corpo-
rate tax rate of 15% (in fiscal 2008: 15%) and thereon a solidar-
ity surcharge of 5.5% for all distributed and retained earnings.
In addition to corporate taxation, trade tax is levied on profits
earned in Germany. As an effect of the German Corporation
Tax Reform 2008, trade tax is a non deductible expense since
2008 resulting in an average trade tax rate of 15% and a com-
bined total tax rate of 31%. Deferred tax assets and liabilities
are measured at tax rates that are expected to apply to the pe-
riod when the asset is realized or the liability is settled. De-
ferred tax assets and liabilities have been measured with the
combined total tax rate of 31%.
Year ended September ,
2009 2008
Current tax:
German corporation and trade taxes 269 124
Foreign income taxes 1,209 1,001
1,478 1,125
Deferred tax:
Germany 1 (212)
Foreign (45) 102
(44) (110)
Income tax expense 1,434 1,015
B27T014_E
Year ended September ,
 
Expected income tax expense 1,206 891
Increase (decrease) in income
taxes resulting from:
Non-deductible losses and expenses 715 533
Goodwill – 1
Tax-free income (421) (259)
Taxes for prior years (76) (31)
Change in judgment of realizability
of deferred tax assets 25 34
Change in tax rates (17) 6
Foreign tax rate differential (116) (86)
Tax effect of investments accounted
for using the equity method 121 (79)
Other, net (3) 5
Actual income tax expense 1,434 1,015
B27T015_E
im Deutschen „0“