11.11 Income taxes

This caption comprises:

   For the first six months of   
 (€’000)   2013   2012 
 IRES   2,805   3,712 
 IRAP   2,224   2,578 
 Other foreign taxes    11,330   6,431 
 Net deferred tax expense    816   5,710 
 Total   17,175   18,431 

Income taxes decreased by an overall €1,256 thousand compared to the corresponding period of the previous year. Specifically, the decrease is due to the parent’s smaller taxable base.
The increase in other foreign taxes is offset by that of the net deferred tax expense in profit or loss.

The difference between the theoretical and effective tax rates is analysed below:

For the first six months of
2013 2012
(€'000) amount % amount %
Pre-tax profit 49,450     48,099 -  
Taxes calculated at ruling tax rates 13,599 27.50% 13,227 27.50%
Permanent differences (3,467) (953) (1.93%) (4,700) (1,292) (2.69%)
 45,98312,64525.57%43,39911,93524.81%
Different rates on foreign taxes and/or due to losses of the year - 3,583 7.25% - 2,637 5.48%
IRAP and other taxes calculated on a basis other than pre-tax profit - 946 1.91% - 3,859 8.02%
Previous year taxes - - 0.00% - - 0.00%
Provisions for tax risks - - 0.00% - - 0.00% 
Total effective taxes recognised in profit or loss 17,175 34.73% 18,431 38.32%

At 30 June 2013, the effective tax rate is 34.73%, compared to 38.32% in the same period of the previous year. The decrease is due to the smaller impact of the loss of the Indian subsidiary on the taxable base.

Deferred taxes and the related assets and liabilities at 30 June 2013 can be analysed as follows:

 Income statement
Statement of financial position
(€'000)Deferred tax
income
Deferred tax
expense
Deferred tax
assets
Deferred tax
liabilitie
Italian post-employment benefits and pension funds 106 - 4,591 1,664
Remuneration 567 - 2,808 -
Property, plant and equipment and intangible assets (275) (159) 1,694 84
Provisions for risks and charges 794 - 10,773 -
Research grants - 76 - -
Allowances for WIP and inventory write-down (177) - 8,779 -
Cash flow hedges - defined benefit plans - - 651 946
Tax losses (417) - 2,991 -
Stock grant plant - - 84 -
Other 546 2,043 6,641 5,833
Total 1,144 1,960 39.012 8,527

The deferred tax assets generated by undeductible accruals to “Provisions for risks and charges” mainly relate to the parent Ansaldo STS S.p.A. (€4,703 thousand) and the US subsidiaries (€4,978 thousand).
The deferred tax assets related to the allowance for inventory write-down mainly relate to the parent Ansaldo STS S.p.A. (€7,727 thousand).
The deferred tax assets related to Italian post-employment benefits and pension funds mainly relate to Ansaldo STS France S.A.S.(€3,939 thousand).
“Other” mainly relates to the parent, Ansaldo STS S.p.A. (€3,835 thousand), the subsidiary Ansaldo STS France S.A.S. (€1,459 thousand) and Ansaldo STS USA Inc. subsidiaries (€1,049 thousand).
Finally, the tax losses relate to the French subsidiary.
Deferred tax assets and liabilities include those recognised with a balancing entry directly in equity, on derivatives recognised as cashflow hedges and actuarial gains/losses following the adoption of the equity method for defined benefit plans. This equity item changed as follows during the period:

31.12.2012 Transfers to
profit or loss
Fair value gains
or losses
Other
changes
30.06.2013
Deferred taxes recognised in equity 1,309 - (37) - 1,272

 

Registered Office: 16151 Genoa Via Paolo Mantovani, 3 - 5
Paid-in Share Capital EUR 70,000,000 R.E.A. n. 421689 Register of Enterprises of Genoa Tax Code 01371160662
A Finmeccanica Company