[14] Income taxes

The income tax expense of €176.8 million (2018: €143.7 million) consisted of €212.8 million in current tax expense (2018: €166.5 million) and €36.0 million in deferred tax income (2018: €22.9 million).

The current corporate income tax rate in Germany is 15.0 per cent plus a solidarity surcharge (5.5 per cent of corporate income tax). Taking into account the average trade tax rate of 14.9 per cent (2018: 14.9 per cent), the combined nominal tax rate for entities in Germany was 30.7 per cent (2018: 30.8 per cent). The income tax rates for foreign companies used in the calculation of deferred taxes were between 9.0 per cent and 34.0 per cent, as had also been the case in 2018.

No deferred taxes have been recognised on temporary differences of €195.1 million (2018: €235.5 million) between the net assets reported in the consolidated financial statements for the Group companies and the tax base for the shares in these Group companies (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 dispose of equity investments in the foreseeable future.

Deferred tax assets are allocated to the following items in the statement of financial position: > TABLE 058

Deferred tax liabilities are allocated to the following items in the statement of financial position: > TABLE 059

The deferred tax liabilities essentially related to purchase price allocations in the acquisition of the KION Group and Dematic, particularly for intangible assets and property, plant and equipment.

The change in deferred taxes included currency effects of €6.1 million that were recognised in other comprehensive income (loss) under cumulative translation adjustment, resulting in a decrease in equity (2018: €7.0 million).

In 2019, the parent company and the consolidated subsidiaries that reported losses for 2019 or 2018 recognised net deferred tax assets on temporary differences and on loss carryforwards totalling €12.8 million (2018: €21.1 million). These assets were considered to be unimpaired because these companies are expected to generate taxable income in future.

No deferred tax assets have been recognised on tax loss carryforwards of €714.9 million (2018: €580.7 million) – of which €128.9 million (2018: €103.1 million) can only be carried forward on a restricted basis – or on interest carryforwards of €283.9 million (2018: €283.9 million). Furthermore, no deferred tax assets have been recognised on other temporary differences of €0.2 million (2018: €7.8 million). Deferred taxes are recognised on tax loss carryforwards and interest carryforwards to the extent that sufficient future taxable income is expected to be generated against which the losses can be utilised. The total amount of unrecognised deferred tax assets relating to loss carryforwards is therefore €173.0 million (2018: €137.4 million), of which €140.9 million (2018: €111.2 million) concerns tax losses that can be carried forward indefinitely.

The KION Group’s corporation-tax loss carryforwards in Germany as at 31 December 2019 amounted to €137.4 million (2018: €115.2 million), while trade-tax loss carryforwards stood at €117.1 million (2018: €95.9 million). There were also foreign tax loss carryforwards totalling €498.6 million (2018: €454.4 million).

The interest that can be carried forward indefinitely in Germany as at 31 December 2019 amounted to €283.9 million (2018: €283.9 million).

The table below shows the reconciliation of expected income tax expenses to effective income tax expenses. 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. > TABLE 060