25. Income tax expenses
|
|
2023 |
|
2022 |
|---|---|---|---|---|
|
|
MCHF |
|
MCHF |
Current taxes |
|
87.1 |
|
131.6 |
Deferred taxes |
|
37.7 |
|
-97.0 |
Total income tax expenses |
|
124.8 |
|
34.6 |
The differences between income tax expenses computed at the weighted-average applicable tax rate of the Group of 15.8% (PY: 15.4%) and the effective income tax expenses were as follows:
|
|
2023 |
|
2022 |
|---|---|---|---|---|
|
|
MCHF |
|
MCHF |
Income tax expenses, at applicable rate |
|
117.1 |
|
114.0 |
Tax losses with no current tax benefit |
|
0.0 |
|
0.0 |
Offsetting of current profits against loss carryforwards without tax assets |
|
0.0 |
|
-1.1 |
Changes in future tax rates |
|
1.2 |
|
0.0 |
Non-deductible expenses and non-taxable income, net |
|
1.7 |
|
-4.4 |
Other |
|
4.8 |
|
-73.9 |
Total income tax expenses |
|
124.8 |
|
34.6 |
In 2021, the OECD published a regulatory framework for a global minimum top-up income tax (the OECD Pillar Two model rules). The rules are designed to ensure that multinational companies within the scope of the rules pay a minimum tax rate of 15% in each jurisdiction where they operate. The Group is within the scope of the OECD Pillar Two model rules.
Both Switzerland and other jurisdictions in which the Group operates have (substantively) enacted the Pillar Two legislation. The legislations will be effective for the Group’s financial year beginning on 1 January 2024. In Switzerland, a Qualified Domestic Minimum Tax (“QDMTT”) will be levied from 1 January 2024 while the implementation of the Income Inclusion Rule (“IIR”) and the Undertaxed Profits Rule (“UTPR”) is currently postponed to a later date. Since the Pillar Two legislations were not effective at 31 December 2023, there is no current income tax exposure for the year ended 31 December 2023. The Group applies the exception to recognizing and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes.
The Group is in the process of assessing its exposure to the Pillar Two legislation when it comes into effect. The assessment indicates that the Group may be affected by top-up tax for its operations from 2024 on.
Geberit decided in 2022 to capitalise future benefits in its tax balance sheet, resulting in a deferred tax income from the capitalisation of a deferred tax asset of MCHF 86. This effect is included in the position “Other” and partially offset by the building of provisions for tax risks. In addition, the position “Other” includes tax benefits from the capitalisation of loss carryforwards following improved operational performance. In 2023, the deferred tax asset of MCHF 86 was reduced by around MCHF 22 due to the revaluation of the underlying assumptions and future benefits. This effect is included in the position “Other” and was partially offset by the reversal of provisions for tax risks. The position “Other” in 2023 also includes additional revaluation effects on deferred taxes.