32 Income taxes

Income taxes in the consolidated income statement

A tax expense of EUR 5.3 billion was recorded in the 2024 financial year. The amount of tax expense essentially reflects the shares of the different countries in profit before income taxes and their respective national tax rates. However, the effective tax rate decreased in particular by the recognized reversal of an impairment loss on the carrying amounts of the stake in the GD tower companies that had no effect on tax. In the prior-year period, a tax expense of EUR 3.7 billion had been recorded despite lower profit/loss before income taxes. The effective tax rate in the prior year was increased in particular by an impairment loss on the carrying amounts of the stake in the GD tower companies that had no effect on tax.

The following table provides a breakdown of income taxes in Germany and internationally:

Deutsche Telekom’s combined income tax rate for 2024 amounts to 31.7 % (2023: 31.4 %, 2022: 31.4 %). It consists of corporate income tax at a rate of 15.0 %, the solidarity surcharge of 5.5 % on corporate income tax, and trade tax at an average multiplier of 454 % (2023: 445 %, 2022: 445 %).

Reconciliation of the effective tax rate. Income taxes of EUR -5,301 million (as expense) in the reporting year (2023: EUR -3,672 million (as expense), 2022: EUR ‑1,937 million (as expense)) are derived as follows from the expected income tax expense/benefit that would have arisen had the statutory income tax rate of the parent company (combined income tax rate) been applied to profit/loss before income taxes:

Current income taxes in the consolidated income statement

The following table provides a breakdown of current income taxes:

Deferred taxes in the consolidated income statement

Deferred taxes developed as follows:

Income taxes in the consolidated statement of financial position

Deferred taxes relate to the following key items in the statement of financial position, loss carryforwards, and tax credits:

The loss carryforwards amount to:

Loss carryforwards and temporary differences for which no deferred taxes were recorded amount to:

In addition, no deferred taxes are recognized on trade tax loss carryforwards of EUR 123 million (December 31, 2023: EUR 145 million) and on temporary differences for trade tax purposes in the amount of EUR 2 million (December 31, 2023: EUR 5 million). Furthermore, apart from corporate income tax loss carryforwards, no deferred taxes amounting to EUR 95 million (December 31, 2023: EUR 152 million) were recognized for other foreign income tax loss carryforwards and, apart from temporary differences for trade tax purposes, no deferred taxes amounting to EUR 4 million (December 31, 2023: EUR 1 million) were recognized for other foreign income taxes.

No deferred tax assets were recognized on the aforementioned tax loss carryforwards and temporary differences as it is not probable that taxable profit will be available in the foreseeable future against which these tax loss carryforwards can be utilized.

A positive tax effect in the amount of EUR 4 million (2023: EUR 3 million, 2022: EUR 3 million) attributable to the utilization of tax loss carryforwards on which deferred tax assets had not yet been recognized was recorded in the reporting year.

The write-up of deferred tax assets resulted in a positive effect of EUR 22 million in the reporting year (2023: EUR 24 million).

No deferred tax liabilities were recognized on temporary differences in connection with equity interests in subsidiaries amounting to EUR 844 million (December 31, 2023: EUR 685 million) as it is unlikely that these differences will be recognized in the near future.

Deferred tax assets on temporary differences of EUR 198 million, attributable to accumulated allowances on equity investments in the Europe operating segment, were recognized, of which EUR 130 million related to potential sales of equity investments. These deferred tax assets were written off in full (measurement adjustment), since the probability of the temporary differences being reversed in the near future cannot be reliably determined.

Disclosures on global minimum level of taxation

Legal regulations under the OECD Pillar 2 Model Rules, which are designed to ensure large multinational enterprise groups pay a minimum level of tax, have been transposed into national law in Germany and consolidated in the German Minimum Tax Act (Mindeststeuergesetz – MinStG). Deutsche Telekom falls within the scope of the MinStG, which is to be applied for the first time for the reporting year. The legal regulations have also been or will be transposed into national law in many other countries in which the Group is active. This meant that foreign subsidiaries of Deutsche Telekom were likewise required to apply national statutory provisions on minimum taxation for the reporting year for the first time. In this connection, provisions of less than EUR 1 million for global minimum tax rates were recognized in the consolidated financial statements as of December 31, 2024. Furthermore, the Group made use of the temporary exemption from the accounting standards for deferred taxes (IAS 12.4A) published by the IASB in May 2023; accordingly, with regard to the regulations for a global minimum level of taxation, no deferred taxes are recognized and no corresponding information is disclosed.