10 Income tax income/expense

The statutory corporation tax rate in Germany for the 2015 assessment period was 15%. Including trade tax and the solidarity surcharge, this resulted in an aggregate tax rate of 29.8%.

A tax rate of 29.8% (previous year: 29.8%) was used to measure deferred taxes in the German consolidated tax group.

The local income tax rates applied for companies outside Germany vary between 0% and 45%. In the case of split tax rates, the tax rate applicable to undistributed profits is applied.

The realization of tax benefits from tax loss carryforwards from previous years resulted in a reduction in current income taxes in 2015 of €302 million (previous year: €136 million).

Previously unused tax loss carryforwards amounted to €18,407 million (previous year: €12,726 million). Tax loss carryforwards amounting to €12,663 million (previous year: €6,719 million) can be used indefinitely, while €4,120 million (previous year: €775 million) must be used within the next ten years. There are additional tax loss carryforwards amounting to €1,624 million (previous year: €5,232 million) that can be used within a period of 15 or 20 years. Tax loss carryforwards of €10,478 million (previous year: €9,422 million), of which €3,567 million (previous year: €3,406 million) can only be utilized subject to restrictions within the next 20 years, were estimated not to be usable overall.

The benefit arising from previously unrecognized tax losses or tax credits of a prior period that is used to reduce current tax expense in the current fiscal year amounts to €50 million (previous year: €50 million). Deferred tax expense was reduced by €110 million (previous year: €49 million) because of a benefit arising from previously unrecognized tax losses and tax credits of a prior period. Deferred tax expense arising from the write-down of deferred tax assets amounts to €68 million (previous year: €253 million). Deferred tax income arising from the reversal of a write-down of a deferred tax asset amounts to €212 million (previous year: €117 million).

Tax credits granted by various countries amounted to €800 million (previous year: €906 million).

No deferred tax assets were recognized for deductible temporary differences of €1,643 million (previous year: €1,531 million) and for tax credits of €439 million (previous year: €504 million) that would expire in the next 20 years, or for tax credits of €14 million (previous year: €172 million) that will not expire.

In accordance with IAS 12.39, deferred tax liabilities of €193 million (previous year: €290 million) for temporary differences and undistributed profits of Volkswagen AG subsidiaries were not recognized because control exists.

Due to the change in the statutory provisions in Germany, a refund claim for corporation tax was recognized as a current tax asset for the first time in fiscal year 2006. The present value of the refund claim was €259 million (previous year: €380 million) at the balance sheet date.

Deferred tax income resulting from changes in tax rates amounted to €2 million at Group level (previous year: €7 million expense).

Deferred taxes in respect of temporary differences and tax loss carryforwards of €8,466 million (previous year: €831 million) were recognized without being offset by deferred tax liabilities in the same amount. The existing tax loss carryforwards of the companies in the German tax group that were recognized due to positive results in the past are required to be included in this analysis for the first time in the reporting period. The companies concerned are expecting positive tax income in the future, following losses in the reporting period or the previous year.

€5,320 million (previous year: €5,180 million) of the deferred taxes recognized in the balance sheet was credited to equity and relates to other comprehensive income. €2 million (previous year: €2 million) of this figure is attributable to noncontrolling interests. There were effects from capital transactions with noncontrolling interest shareholders in the reporting period and the prior-year period. Changes in deferred taxes classified by balance sheet item are presented in the statement of comprehensive income.

In the reporting period, tax effects of €11 million (previous year: €19 million) resulting from equity transaction costs were recognized in equity.

DEFERRED TAXES CLASSIFIED BY BALANCE SHEET ITEM

The following recognized deferred tax assets and liabilities were attributable to recognition and measurement differences in the individual balance sheet items and to tax loss carryforwards:

In accordance with IAS 12, deferred tax assets and liabilities are offset if, and only if, they relate to income taxes levied by the same taxation authority and relate to the same tax period.

The tax expense reported for 2015 of €59 million (previous year: €3,726 million) was €447 million higher (previous year: €683 million lower) than the expected tax income of €388 million that would have resulted from application of a tax rate for the Group of 29.8% to the earnings before tax of the Group.