25. Deferred tax assets/deferred tax liabilities

Deferred taxes on tax loss carry-forwards and temporary differences amount to €1,466 million before netting (30/9/2014: €1,762 million), a decline of €296 million compared with 30 September 2014. The carrying amounts of deferred tax liabilities declined by €173 million to €884 million compared with the previous year (30/9/2014: €1,057 million).

The decline in deferred tax assets and deferred tax liabilities on tax loss carry-forwards and temporary differences is essentially due to the deconsolidation of the Galeria Kaufhof group.

Deferred taxes relate to the following balance sheet items:

Of the deferred tax assets shown, €390 million (30/9/2014: €492 million) is attributable to the incorporated companies of METRO AG. Based on business planning, realisation of this tax asset is to be considered sufficiently probable. The implementation of a new transfer price system in the METRO Cash & Carry segment as of 1 October 2015 had a positive effect on the impairment test for deferred taxes as it allowed for the compensation of opposite tax effects in connection with the deconsolidation of the Galeria Kaufhof group in particular.

In accordance with IAS 12 (Income Taxes), deferred tax liabilities relating to differences between the carrying amount of a subsidiary’s pro rata assets and liabilities in the balance sheet and the carrying amounts of the investments for this subsidiary in the parent company’s tax statement must be capitalised (so-called outside basis differences) if the tax benefit is likely to be realised in the future. The differences can primarily be attributed to retained earnings of subsidiaries in Germany and abroad. No deferred taxes were recognised for these retained earnings as they will be reinvested over an indefinite period of time or are not subject to relevant taxation. Any dividends paid by subsidiaries would be subject to a dividend tax of 5 per cent. In addition, foreign dividends may trigger a withholding tax. As of 30 September 2015, €4 million (30/9/2014: €0 million) in deferred tax liabilities from outside basis differences were recognised for planned dividend payments. There were no circumstances leading to a corresponding deferral during the previous year. Due to the hierarchical structure of METRO GROUP, the determination of the taxable temporary differences would require undue efforts.

No deferred tax assets were capitalised for the following tax loss carry-forwards and interest carry-forwards or temporary differences because realisation of the assets in the short-to-medium term is not expected:

The losses primarily concern Germany. They can be carried forward without limitation.

Tax effects on components of other comprehensive income

As a result of non-taxable events as well as the non-recognition and impairment of deferred taxes, the recognised tax does not correspond to the estimated tax for each item.