Annual Report 2022

10 Income taxes

Tax expenses comprise the following positions:

The tax on the group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows:

The group’s expected average tax rate is the aggregate obtained by applying the expected tax rate for each individual jurisdiction to its respective result before taxes.

In 2022 the group EBT is significantly impacted by the fair value loss of financial assets (prior year gain included in position 'Income not subject to tax') and increased expenses for future earn-out payments. Simultaneously, the group has taxable profits in other jurisdictions. The fair value loss and the earn-out expenses are mainly non-tax deductible and are therefore included in 'Expenses not deductible for tax purposes'. The impact results in a weighted average expected tax rate of –119.3% (prior year: 19.9%).

The group has not recognised deferred tax assets of TCHF 2,024 (prior year: TCHF 2,992) in respect of losses for the period ended 31 December 2022 of TCHF 9,043 (prior year: TCHF 12,685).

Other effects in 2022 are mainly related to withholding taxes on intercompany transactions and additional local taxes. Other effects in 2021 were mainly related to withholding taxes on intercompany transactions.

Deferred income tax

Deferred tax expense of TCHF 1,048 (prior year: TCHF 1,942) is recorded in other comprehensive income on actuarial losses on defined benefit liabilities and on hedge accounting, refer to Note 20 Defined benefit liabilities and Note 14 Derivative financial instruments.

Deferred tax assets and liabilities are based on the temporary differences between group valuation and tax bases.

For some group companies, dividend payments are subject to a withholding tax which cannot be fully recovered in Switzerland. The company has not recognised deferred tax liabilities associated with investments in subsidiaries where the group can control the reversal of the temporary differences and where it is not probable that the temporary differences will reverse in the foreseeable future.

The aggregate amount of temporary differences associated with investments in subsidiaries for which no deferred tax liabilities have been recognised amounted to TCHF 33,515 (prior year: TCHF 41,338).

The movement of available tax loss carry forwards is as follows:

Deferred tax assets of TCHF 9,876 (prior year: TCHF 13,995) were recorded in respect of available tax loss carry forwards of TCHF 37,061 (prior year: TCHF 52,099).

Tax loss carry forwards as of 31 December 2020 included tax losses in the amount of TCHF 92,161 (no expiry date) originating from the Austrian permanent establishment of COMPAREX AG in Germany. In 2020, the Austrian permanent establishment of COMPAREX AG was dissolved. It was legally uncertain if these tax loss carry forwards were transferred to the head office of COMPAREX AG. Therefore, no deferred tax asset was recognised. As of 31 December 2022, tax loss carry forwards are no longer included in the table above due to a negative final court decision (prior year: TCHF 25,062).

Tax losses, for which no deferred tax asset was recognised will expire as follows: