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29. Income taxes

Major components of tax expenses/(income)
in thousand EUR   2019   2018
Current tax expenses/(income)   357   322
Deferred tax expenses/(income) relating to temporary differences   3 281   339
Total income taxes   3 638   661
Reconciliation of tax expenses/(income)
in thousand EUR   2019   2018
Earnings before tax   11 611   –1 056
Expected tax expenses/(income) based on a weighted average   3 203   –281
Tax adjustments related to prior years     321
Derecognition of previously recognized deferred tax assets   1 539   260
Recognition of previously recognized deferred tax assets   –2 633  
Minimum tax in Gabon   405  
Change in permanent differences   292   65
Non-deductible expenses   566   296
Other   266  
Total income taxes   3 638   661

The weighted average applicable tax rate, considering all profit- and loss-making entities, was 28 % (2018: 27 %).

Deferred income tax
in thousand EUR   2019   2018
Total deferred tax assets   8 448   3 064
Total deferred tax liabilities   –21 376   –3 015
Net deferred tax assets/(liabilities)   –12 928   49

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset them and when the deferred income taxes relate to the same tax authority.

Deferred income tax assets
in thousand EUR   2019   2018
Inventories   33  
Property, plant and equipment     1 090
Tax loss carry-forwards   2 371   1 011
Provisions   180  
Financial liabilities   5 062   484
Other   802   479
Total deferred tax assets   8 448   3 064
Deferred income tax liabilities
in thousand EUR   2019   2018
Property, plant and equipment   –16 617   –2 490
Biological assets   –4 474  
Intangible assets   –285   –368
Financial assets     –25
Other     –132
Total deferred tax liabilities   –21 376   –3 015
 
Net deferred tax assets/(liabilities)   –12 928   49
Reported in the balance sheet as follows:        
Deferred tax assets     1 620
Deferred tax liabilities   –12 928   –1 571
Net deferred tax assets/(liabilities)   –12 928   49

Net movement of the deferred income tax account is as follows:

in thousand EUR   2019   2018
At 1 January   49   381
Income statement charge   –3 281   –339
Tax charged to other comprehensive income   –9 966   3
Currency effects   270   3
At 31 December   –12 928   49

The Group did not recognize deferred income tax assets on deductible temporary differences of EUR 5.1 million (2018: EUR 15.9 million) and on unused tax losses of EUR 65.7 million (2018: EUR 88.7 million).

These unrecognized tax loss carry-forwards expire as presented in the table below:

in thousand EUR   2019   2018
0–2 years   17 674   28 895
3–4 years   28 851   35 538
5–7 years   366   954
over 7 years   18 764   23 284
Total tax loss carry-forwards   65 655   88 671

EUR 10.1 million of these tax loss carry-forwards belong to the Dutch operations of Precious Woods with an applicable tax rate of 19 % (2018: EUR 11.7 million with an applicable tax rate of 20 %), EUR 6.8 million belong to the Brazilian operations with an applicable tax rate of 34 % (2018: EUR 12.7 million with an applicable tax rate of 34 %), EUR 11.9 million belong to the Gabonese operations with an applicable tax rate of 30 % (2018: EUR 12.8 million with an applicable tax rate of 30 %) and EUR 36.8 million belong to the Swiss operation with an applicable tax rate of 11.91 % (2018: EUR 53.9 million with an applicable tax rate of 9.6 %).

Accounting policies

The charge for current income tax is based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates for the countries where the Group has operations. Deferred income taxes are accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements, and the corresponding tax basis used in the computation of taxable profit. Deferred income tax liabilities are generally recognized for all taxable temporary differences, and deferred income tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction, which, at the time of the transaction, affects neither the taxable profit nor the accounting profit.