ÖBB Annual Report 2023

247 Consolidated Financial Statements Österreichische Bundesbahnen-Holding Aktiengesellschaft Consolidated Financial Statements | Group Management Report 29 The use of tax losses is subject to the primacy of the subgroup approach and the principle of equal treatment of the participants in the group of companies within the respective subgroup; in addition, the principle of equal treatment of the participants in the group of companies applies to the use of tax losses across subgroups. As at the reporting date, the tax group financial unity for VAT purposes pursuant to Section 2 UStG consists of the controlling company ÖBB-Holding AG and several Austrian companies of the ÖBB Group. Income taxes and deferred taxes Income taxes include both current and deferred taxes. Current taxes relate to all taxes levied on the taxable profit of Group companies. Other taxes such as asset-related taxes or operating taxes (electricity, energy) are included in the corresponding operating expenses. Deferred tax assets and liabilities are recognised in accordance with IAS 12 “Income Taxes” for all temporary differences between tax and IFRS carrying amounts, for tax credits and loss carryforwards in the consolidated financial statements. Deferred taxes are recognised – subject to existing exemption provisions – for all temporary differences between the tax base of assets and debts (“tax base”) and their carrying amounts in the IFRS financial statements (so-called liability method), insofar as these relate to assets and debts connected with non-exempt business operations. Deferred tax assets and deferred tax liabilities in connection with the global minimum taxation are not recognised due to the existing temporary exemption under IAS 12. If deferred taxes arise from the initial recognition of an asset or a debt resulting from a transaction other than a business combination which neither affects the accounting profit or loss nor the taxable profit at the time of the transaction, no deferred taxes are recognised at the time of initial recognition and thereafter. Deferred tax debts arising from temporary differences in connection with investments in subsidiaries and associated companies are recognised, unless the ÖBB-Personenverkehr Group is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future due to this influence. Deferred taxes are measured at the tax rates (and under the tax regulations) that have been enacted or substantially enacted on the reporting date and that are expected to apply in the period when the deferred tax claims are realised or the deferred tax debts are expected to be settled. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences and loss carryforwards are utilised. Deferred taxes are offset directly with equity or credited to it when the tax relates to items that are offset or credited to equity in the same or another period. The International Tax Reform – Pillar II legislation (global minimum taxation) was already transposed into Austrian law as at 31.12.2023. The law applies for the first time for the financial years beginning after 31.12.2023. The ÖBB Group falls within the scope of these regulations in the future. The ÖBB Group has begun an initial indicative analysis in order to determine the future fundamental impact and the jurisdictions from which the ÖBB Group is exposed to possible effects in connection with a Pillar II top-up tax (primary supplementary tax) or a Qualified Domestic Minimum Top-up Tax (national supplementary tax). The top-up tax is applied at the level of ÖBB-Holding AG. At local level, ÖBB-Holding AG Group companies may be subject to any national supplementary taxes. The ongoing analysis is examining whether the ÖBB Group would possibly be affected by the introduction of a Qualified Domestic Minimum Top-up Tax. The Group closely monitors the progress of the local legislative process in each country in which the ÖBB Group operates. The complex application of the legislation and the calculation of GloBE-income mean that it is not yet possible to estimate the quantitative impact of the legislation that has been passed or entered into effect. The ÖBB Group is constantly analysing the effects of the Pillar II legislation on the future profitability of the Group. At the present time, it is assumed that no significant increases in current taxes will arise as a result of the legislation. The simplification provision is applied, which states that no deferred taxes resulting from the introduction of global minimum taxation are recognised.