Half-Year Report 2019

11 Income Taxes

Income taxes relate to current taxes in the amount of € 36.9 million (first half of 2018: € 28.1 million) and deferred taxes in the amount of € 739.4 million (first half of 2018: € 618.6 million).

The income tax expense is based on the average effective consolidated tax rate to be expected for the entire fiscal year. The ratio of tax expense to profit before tax (consolidated tax rate) rose from 35.0% in the first half of 2018 to 86.1% in the first half of 2019.

The increase in the consolidated tax rate is primarily due to the goodwill impairment of € 1,901.0 million (first half of 2018: € 0.0 million), which is not subject to tax. As the expenses resulting from the goodwill impairment loss are not tax-deductible, they influence pre-tax income but have no impact on tax expense. Similarly, the goodwill impairment does not result in deferred tax income, as the recognition of deferred tax liabilities was not permitted when the goodwill was initially recognized.