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8. Income taxes

Audited information

In CHF 1,000

2020

2019

Current income taxes

8,504

8,556

Deferred income taxes

10,571

–53,527

Total income taxes

19,076

–44,970

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

In CHF 1,000

2020

2019

Profit before taxes

132,672

127,855

Expected Group tax rate

16%

23%

Expected income taxes

21,227

29,407

 

 

 

Non-deductible expenses

163

152

Tax-free income

–585

–6,014

Use of non-capitalised tax losses carried forward

–11

–122

Non-capitalisable tax losses for the period

127

56

Expenses/income which are taxed at a lower/higher tax rate

–1,779

–7,359

Impact of changes in tax rate on deferred tax items recognised

–119

–61,365

Tax effects for prior periods

54

275

Effective income tax charge

19,076

–44,970

Effective tax rate

14%

–35%

Deferred income taxes are calculated for each subsidiary using the local tax rates. Due to the implementation of the tax reform in Canton Geneva, the expected Group tax rate was reduced from 23% in 2019 to 16% in 2020. In 2020, the non-capitalised tax assets from losses carried forward amount to CHF 0.1 million (2019: CHF 0.1 million). Deferred income tax assets relate to deferred income taxes on temporary differences. Accrued expenses and other liabilities include accrued taxes of CHF 5.7 million (2019: CHF 3.9 million).

Due to the release of deferred tax liabilities the total income taxes resulted in an income in 2019. In 2019, deferred taxes in the amount of CHF 61.4 million were reversed after the Canton of Geneva voted on 19 May 2019 that the corporate tax reform should be implemented at cantonal level at the beginning of 2020.

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