All for One Group AG Recognises Tax Income of EUR 2.9 million from Previously Disputed Loss Carryforwards
Filderstadt, 07 May 2019 – In its half-year financial report, All for One Group AG, leading consulting and IT group, is reporting tax income of EUR 2.9 million. The tax income includes refunds of corporate income tax, solidarity surcharges and trade tax for the 2015 and 2016 tax years. In addition to the tax income, the financial result also includes interest income of EUR 0.3 million.
Due to changes in the shareholder structure of All for One Group AG in the financial year 2011, recognition of corporate income tax and trade tax losses carried forward in a total amount of EUR 19.7 million was withdrawn (Section 8c German corporate income tax law) following a tax audit in May 2015. The company appealed against the ruling, citing pending court cases: In March 2018 the appeal was upheld in the form of revised provisional tax assessments for the tax year 2011. Up to and including 2016, the loss carryforwards were fully offset against profits through revised tax assessments.
Until now, it seemed likely that reimbursement of these refunds would be demanded in light of the uncertainties surrounding the taxation issue relating to the provisional nature of the tax assessment and the pending court cases. This is why the amount was initially recognised with no impact on profit or loss (provision on the balance sheet).
Having examined recent facts and circumstances, All for One Group AG has reached the conclusion that it is unlikely according to IAS 37 that the return of the refunds will be demanded. Accordingly, the transaction previously recognised with no impact on profit or loss, now has been reclassified as tax income of EUR 2.9 million and interest income of EUR 0.3 million in the consolidated income statement and only remains as a contingent liability in the notes to the consolidated financial statements.
The tax rate (income tax/EBT, 2017/18: 30%) of the financial year 2018/19 is likely to be significantly lower. The EBIT 2018/19 will not be affected.