The difference between the expected income tax expense and the income tax expense shown in the income statement can be explained as follows:

Deferred income taxes are calculated for each subsidiary using the local tax rates.  In 2018, the non-capitalised tax assets from losses carried forward decreased from CHF 1.0 million in 2017 to CHF 0.5 million. Deferred income tax assets relate to deferred income taxes on temporary differences. Accrued expenses and other liabilities include accrued taxes of CHF 5.8 million (2017: CHF 0.7 million). In 2017, the anticipated deferred taxes decreased as a result of the determined tax rate changes; this resulted in a positive tax effect of CHF 12.3 million.

Due to the release of deferred tax liabilities the total income taxes resulted in an income in 2017.

In 2017, deferred taxes in the amount of CHF 10.8 million had to be reversed due to an announcement by Canton Vaud on 1 November 2017, that corporate tax reform would be implemented on the cantonal level at the beginning of 2019. This reform sets the new corporate tax rate in the Canton of Vaud at 13.79% as from 1 January 2019.