[16] Income taxes

The income tax expense of €149,540 thousand (2011: expense of €34,041 thousand) consisted of €122,137 thousand in current tax expense (2011: €49,349 thousand) and €27,403 thousand in deferred tax expense (2011: deferred tax income of €15,308 thousand). The current tax expense includes expenses of €8,820 thousand (2011: expenses of €2,602 thousand) relating to previous financial years.

At the reporting date there were income tax receivables due from tax authorities of €5,501 thousand (2011: €4,953 thousand) and income tax liabilities of €84,958 thousand (2011: €15,439 thousand).

Deferred taxes are recognised for temporary differences between the tax base and the carrying amounts under IFRS. Deferred taxes are determined on the basis of the tax rates that will apply or are expected to apply at the realisation date in accordance with the current legal situation in each country concerned. The current corporate income tax rate in Germany is 15.0 per cent. Taking into account the average trade tax rate of 14.11 per cent and the solidarity surcharge (5.5 per cent of corporate income tax), the combined tax rate for companies in Germany remained at 29.9 per cent. The income tax rates for foreign companies used in the calculation of deferred taxes are between 10.0 per cent and 38.1 per cent (2011: 10.0 per cent and 38.5 per cent).

No deferred taxes have been recognised on differences of €96,090 thousand (2011: €100,146 thousand) between the IFRS carrying amounts and the tax base of the investments (outside basis differences) because the KION Group is in a position to manage the timing of the reversal of temporary differences and there are no plans to sell the investments in the foreseeable future.

Deferred tax assets are allocated to the following items in the statement of financial position:

Deferred tax liabilities are allocated to the following items in the statement of financial position:

The deferred tax liabilities essentially relate to the purchase price allocation as a result of the acquisition of KION Group, particularly for intangible assets and property, plant and equipment.

Deferred tax assets amounting to €233,162 thousand (2011: €211,398 thousand) have not been recognised because due to the current tax structure it is unlikely that the corresponding benefit can be utilised despite the improved income situation. Unrecognised deferred tax assets relate to tax loss carryforwards of €108,630 thousand (2011: €91,636 thousand), interest carryforwards of €123,952 thousand (2011: €116,060 thousand) and other temporary differences of €580 thousand (2011: €3,702 thousand).

Deferred taxes on tax loss carryforwards and interest carryforwards are recognised to the extent that sufficient future taxable income is expected to be generated against which the losses can be utilised. The deferred tax assets recognised on interest carryforwards in 2011 were utilised in the year under review. No deferred taxes on interest carryforwards had been recognised as at 31 December 2012. The total amount of unrecognised deferred tax assets relating to loss carryforwards of €108,630 thousand (2011: €91,636 thousand) concerns tax losses that can be carried forward indefinitely.

The KION Group's tax loss carryforwards in Germany as at 31 December 2012 amounted to €289,786 thousand (31 December 2011: €381,941 thousand) for corporate income tax and €270,800 thousand (31 December 2011: €263,525 thousand) for trade tax. There were also foreign tax loss carryforwards totalling €190,476 thousand (31 December 2011: €187,438 thousand).

The interest that can be carried forward for an indefinite period of time in Germany amounted to €463,461 thousand as at 31 December 2012 (31 December 2011: €464,939 thousand).

The table below shows the reconciliation of expected income tax expense to effective income tax expense. The Group reconciliation is an aggregation of the individual company-specific reconciliations prepared in accordance with relevant local tax rates, taking into account consolidation effects recognised in income. The expected tax rate applied in the reconciliation is 29.9 per cent (2011: 29.8 per cent).

Tax-exempt income includes €17,410 thousand of tax-exempt income in connection with the transfer of significant parts of the former hydraulics business of LMH GmbH to Linde Hydraulics.