28. Income taxes
Major components of tax expenses/(income)
| in thousand EUR | 2021 | 2020 | ||
|---|---|---|---|---|
| Current tax expenses/(income) | 1 598 | 699 | ||
| Deferred tax expenses/(income) relating to temporary differences | 1 665 | 412 | ||
| Total income taxes | 3 263 | 1 111 |
Reconciliation of tax expenses/(income)
| in thousand EUR | 2021 | 2020 | ||
|---|---|---|---|---|
| Earnings before tax | 7 949 | –1 070 | ||
| Expected tax expenses/(income) based on a weighted average | 2 371 | –147 | ||
| Derecognition of previously recognized deferred tax assets | 1 138 | 759 | ||
| Minimum tax in Gabon | 345 | 434 | ||
| Change in permanent differences | –568 | 7 | ||
| Non-deductible expenses | – | 58 | ||
| Other | –23 | – | ||
| Total income taxes | 3 263 | 1 111 |
The weighted average applicable tax rate, considering all profit- and loss-making entities, was 28 % (2020: 28 %).
Deferred income tax
| in thousand EUR | 2021 | 2020 | ||
|---|---|---|---|---|
| Total deferred tax assets | 9 873 | 9 950 | ||
| Total deferred tax liabilities | –17 422 | –16 164 | ||
| Net deferred tax assets/(liabilities) | –7 549 | –6 214 |
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 | 2021 | 2020 | ||
|---|---|---|---|---|
| Inventories | 26 | 27 | ||
| Tax loss carry-forwards | 1 234 | 1 747 | ||
| Provisions | 138 | 113 | ||
| Financial liabilities | 7 764 | 7 348 | ||
| Other | 711 | 715 | ||
| Total deferred tax assets | 9 873 | 9 950 |
Deferred income tax liabilities
| in thousand EUR | 2021 | 2020 | ||
|---|---|---|---|---|
| Property, plant and equipment | –12 336 | –12 481 | ||
| Biological assets | –4 881 | –3 455 | ||
| Intangible assets | –205 | –228 | ||
| Total deferred tax liabilities | –17 422 | –16 164 | ||
| Net deferred tax assets/(liabilities) | –7 549 | –6 214 | ||
| Reported in the balance sheet as follows: | ||||
| Deferred tax assets | – | – | ||
| Deferred tax liabilities | –7 549 | –6 214 | ||
| Net deferred tax assets/(liabilities) | –7 549 | –6 214 | ||
Net movement of the deferred income tax account is as follows:
| in thousand EUR | 2021 | 2020 | ||
|---|---|---|---|---|
| At 1 January | –6 214 | –12 928 | ||
| Income statement charge | –1 665 | –412 | ||
| Tax charged to other comprehensive income | 389 | 3 996 | ||
| Currency effects | –59 | 3 130 | ||
| At 31 December | –7 549 | –6 214 |
The Group did not recognize deferred income tax assets on deductible temporary differences of EUR 5.7 million (2020: EUR 4.6 million) and on unused tax losses of EUR 40.5 million (2020: EUR 43.5 million).
These unrecognized tax loss carry-forwards expire as presented in the table below:
| in thousand EUR | 2021 | 2020 | ||
|---|---|---|---|---|
| 0–2 years | 26 218 | 36 668 | ||
| 3–4 years | – | 954 | ||
| 5–7 years | 6 868 | 2 681 | ||
| over 7 years | 7 369 | 3 237 | ||
| Total tax loss carry-forwards | 40 455 | 43 540 |
EUR 5.4 million of these tax loss carry-forwards belong to the Dutch operations of Precious Woods with an applicable tax rate of 15 % (2020: EUR 9.0 million with an applicable tax rate of 19 %), EUR 3.3 million belong to the Brazilian operations with an applicable tax rate of 34 % (2020: EUR 3.2 million with an applicable tax rate of 34 %), and EUR 31.8 million belong to the Swiss operation with an applicable tax rate of 11.85 % (2020: EUR 31.3 million with an applicable tax rate of 11.91 %). From the Gabonese operations no tax loss carry-forwards remain from 2020 (2020: EUR 0.0 million).
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.