Siemens 2013 Annual Report Download - page 281

253 D. Consolidated Financial Statements 357 E. Additional Information
254 D. Consolidated Statements of Income
255 D. Consolidated Statements of Comprehensive Income
256 D. Consolidated Statements of Financial Position
257 D. Consolidated Statements of Cash Flows
258 D. Consolidated Statements of Changes in Equity
260 D. Notes to Consolidated Financial Statements
348 D. Supervisory Board and Managing Board

In Germany, the calculation of current tax is based on a corpo-
rate tax rate of % and a solidarity surcharge thereon of .%,
for all distributed and retained earnings. In addition to corpo-
rate taxation, trade tax is levied on profits earned in Germany.
As the German trade tax is a non deductible expense, the aver-
age trade tax rate amounts to % and the combined total tax
rate results in %. Deferred tax assets and liabilities are mea-
sured at tax rates that are expected to apply to the period when
the asset is realized or the liability is settled.
For foreign subsidiaries, current taxes are calculated based on
the local tax laws and applicable tax rates in the individual for-
eign countries. Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply to the period when
the asset is realized or the liability is settled.
Income tax expense (current and deferred) differs from the
amounts computed by applying a combined statutory German
income tax rate of % as follows:
Year ended September ,
(in millions of €)  
Expected income tax expenses 1,811 2,058
Increase (decrease) in income taxes
resulting from:
Non-deductible losses and expenses 380 388
Tax-free income (346) (398)
Taxes for prior years 50 (59)
Change in realizability of deferred
tax assets and tax credits 23 (17)
Change in tax rates (31) (39)
Foreign tax rate differential (182) (52)
Tax effect of investments accounted
for using the equity method (74) 115
Other, net (1) (2)
Actual income tax expenses 1,630 1,994
The tax free income in fiscal  is amongst others attribut-
able to the NSN disposal.
Deferred income tax assets and liabilities on a gross basis are
summarized as follows:
September ,
(in millions of €)  
Assets:
Financial assets 54 52
Other intangible assets 190 169
Property, plant and equipment 303 288
Inventories 558 551
Receivables 682 541
Post-employment benefits 2,954 3,238
Provisions 1,685 1,677
Liabilities 2,014 2,513
Tax loss and credit carryforward 918 1,296
Other 282 231
Deferred tax assets 9,640 10,556
Liabilities:
Financial assets 239 236
Other intangible assets 1,582 1,407
Property, plant and equipment 631 782
Inventories 1,700 1,857
Receivables 1,776 2,061
Provisions 601 450
Liabilities 69 156
Other 312 353
Deferred tax liabilities 6,910 7,302
Total deferred tax assets, net 2,730 3,254
In assessing the realizability of deferred tax assets, manage-
ment considers the extent to which it is probable that the de-
ferred tax asset will be realized. The ultimate realization of de-
ferred tax assets is dependent upon the generation of future
taxable profits during the periods in which those temporary
differences and tax loss carryforwards become deductible.
Management considers the expected reversal of deferred tax
liabilities and projected future taxable income in making this
assessment. Based upon the level of historical taxable income
and projections for future taxable income over the periods in
which the deferred tax assets are deductible, management be-
lieves it is probable the Company will realize the benefits of
these deductible differences. As of September , , the
Company has certain tax losses subject to significant limita-
tions. For those losses deferred tax assets are not recognized,
as it is not probable that gains will be generated to offset those
losses.