Notes to the Consolidated Financial Statements
1. Basic information
2. Changes in Group structure
3. Summary of significant accounting policies
4. Risk assessment and management
5. Management of capital
6. Trade accounts receivable
7. Other current assets and current financial assets
8. Inventories
9. Property, plant and equipment
10. Other non-current assets and non-current financial assets
11. Goodwill and intangible assets
12. Short-term debt
13. Other current liabilities and provisions
14. Long-term debt
15. Financial instruments
16. Retirement benefit plans
17. Participation plans
18. Deferred tax assets and liabilities
19. Other non-current liabilities and provisions
20. Contingencies
21. Capital stock and treasury shares
22. Earnings per share
23. Other operating expenses, net
24. Financial result, net
25. Income tax expenses
| 2020 | 2019 | |
| MCHF | MCHF | |
| Current taxes | 113.9 | 103.9 |
| Deferred taxes | -1.9 | -8.0 |
| Total income tax expenses | 112.0 | 95.9 |
The differences between income tax expenses computed at the weighted-average applicable tax rate of the Group of 15.1% (PY: 15.1%) and the effective income tax expenses were as follows:
| 2020 | 2019 | |
| MCHF | MCHF | |
| Income tax expenses, at applicable rate | 114.1 | 112.1 |
| Operating losses with no current tax benefit | 1.3 | 0.0 |
| Offsetting of current profits against loss carryforwards without tax assets | -1.5 | -1.6 |
| Changes in future tax rates | -1.5 | -3.4 |
| Non-deductible expenses and non-taxable income, net | 1.8 | 2.5 |
| Other | -2.2 | -13.7 |
| Total income tax expenses | 112.0 | 95.9 |
The decrease of the position “Other” in 2020 is caused by the reversal of several tax provisions, which were no longer used, and capitalised loss carryforwards in the previous year.
Swiss Tax Reform
On 19 May 2019, the Swiss electorate passed the Federal Act on Tax Reform and AHV Financing (TRAF). With this vote, the new tax law in the Canton of St. Gallen also entered into force. Under this reform, the tax regimes for holding companies, domiciliary companies and mixed companies, which are no longer accepted internationally, were abolished with effect from 1 January 2020. Some Swiss Geberit companies are also affected by this. In return, the cantons reduced the ordinary corporate tax rates and introduced internationally acceptable tax benefits, from which selected subsidiaries will also benefit. The ordinary tax rate for the Group companies domiciled in the Canton of St. Gallen was reduced from 17.4% to 14.5% as at 1 January 2020. The deferred taxes of these companies were adjusted accordingly as at 31 December 2019.
