32 Income taxes

Income taxes in the consolidated income statement

A tax expense of EUR 4.6 billion was recorded in the 2025 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 due to the reversals of impairment losses on the carrying amounts of the stakes in the GD tower companies and GlasfaserPlus that had no effect on tax. In addition, the remeasurement of deferred taxes due to the future reduction of the corporate income tax rate in Germany reduced the tax rate, as well as the realization of a tax benefit in the Europe operating segment. In the prior year, a tax expense of EUR 5.3 billion was recorded. The effective tax rate also decreased by the recognized reversals of impairment losses on the carrying amounts of the stakes in the GD tower companies and GlasfaserPlus 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 2025 amounts to 31.7 % (2024: 31.7 %; 2023: 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 % (2024: 454 %; 2023: 445 %).

Reconciliation of the effective tax rate. Income taxes of EUR ‑4,573 million (as expense) in the reporting year (2024: EUR ‑5,301 million (as expense); 2023: EUR ‑3,672 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

Current income taxes in the consolidated statement of financial position

Deferred taxes in the consolidated statement of financial position

Deferred taxes developed as follows:

Deferred taxes on loss carryforwards developed as follows:

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 35 million (December 31, 2024: EUR 123 million) and on temporary differences for trade tax purposes in the amount of EUR 1 million (December 31, 2024: EUR 2 million). Furthermore, apart from corporate income tax loss carryforwards, no deferred taxes amounting to EUR 67 million (December 31, 2024: EUR 95 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, 2024: EUR 4 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 9 million (2024: EUR 4 million; 2023: 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 39 million in the reporting year (2024: EUR 22 million).

Deferred tax assets of EUR 24 million from the business combination of T‑Mobile US with Sprint were recognized for the first time.

No deferred tax liabilities were recognized on temporary differences in connection with equity interests in subsidiaries amounting to EUR 1,014 million (December 31, 2024: EUR 844 million) as it is unlikely that these differences will be recognized in the near future.

Income taxes in the statement of comprehensive income

Change in taxation laws in Germany

On July 11, 2025, the Bundesrat adopted the law for an immediate tax investment program to strengthen Germany as a business location. The law entered into force on July 19, 2025 and provides, among other things, for the introduction of a declining-balance depreciation allowance for certain assets as well as a gradual reduction of the corporate income tax rate from 2028. In connection with the improved depreciation framework, a partial deferral of income tax payments to future periods is to be expected.

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. 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. In this connection, provisions of EUR 1 million for global minimum tax rates were recognized in the consolidated financial statements as of December 31, 2025. 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.

Change in taxation laws in the United States

On July 4, 2025, U.S. President Donald Trump signed the One Big Beautiful Bill Act (the “OBBBA”) into law. This Act includes numerous changes to existing tax law, including provisions regarding depreciation and amortization of certain assets, limitations on interest deductions, and the deductibility of research and development expenditure. These provisions became effective beginning in 2025, and are expected to result in a partial deferral of income tax payments to future periods. They are currently not expected to have a material impact on our net profit. We will, however, continue to assess the impact of changes to tax legislation arising from OBBBA on our consolidated financial statements.