ANNUAL REPORT 2012

Financials

9. Income taxes


Income taxes in the income statement

EUR million 2012 2011
Current year income taxes -20.7 -17.8
Prior year income taxes -0.1 0.2
Change in deferred taxes -0.7 12.1
Income taxes total -21.5 -5.5






Reconciliation of income taxes

EUR million 2012 2011
Tax rate for the parent company 24.5% 26.0%
Profit before taxes 196.7 161.8
Income tax using the domestic corporation tax rate -48.2 -42.1
Effect of tax rates in foreign jurisdictions -4.0 -2.3
Income tax for prior years -0.1 0.2
Impact of associate 10.8 11.1
Effect of sales of Wärtsilä shares 22.9 18.2
Other tax exempt items 1.0 1.6
Effect of disposals
1.0
Non-deductible expenses -0.9 -2.0
Effect of change of tax rates 0.0 2.0
Tax booked against unbooked tax assets and unrecognized tax on loss -3.5 -2.9
Change in valuation of tax assets 0.5 9.7
Other items 0.0 -0.1
Income taxes recognized in profit and loss -21.5 -5.5






Taxes in other comprehensive income

2012
EUR million Total Tax Net
Translation differences -1.0
-1.0
Change in associate recognized directly in other comprehensive income 0.1
0.1
Cash flow hedges -1.1 0.3 -0.8
Defined benefit plan actuarial gains (losses) -0.8 0.3 -0.5
Other comprehensive income for the period, total -2.8 0.6 -2.2






2011
EUR million Total Tax Net
Translation differences 3.5
3.5
Change in associate recognized directly in other comprehensive income -2.4
-2.4
Cash flow hedges -0.7 0.2 -0.5
Defined benefit plan actuarial gains (losses) -0.5 0.2 -0.3
Other comprehensive income for the period, total -0.1 0.4 0.2

Deferred income taxes in the balance sheet

2012


Recognized Recognized Transfers
Deferred tax assets
in in other and

Jan 1, income comprehensive translation Dec 31,
EUR million 2012 statement income difference 2012
Post-employment benefit 2.6 0.0 0.2 0.0 2.7
Provisions 10.0 0.2
0.0 10.1
Effects on consolidation and eliminations 1.3 -0.6
-0.2 0.5
Property, plant & equipment 0.7 -0.1
0.0 0.6
Tax losses and tax credits carried forward 15.7 -1.1
-0.1 14.6
Valuation allowance of deferred tax assets -8.6 1.7
0.9 -6.0
Other temporary differences 6.1 0.8 0.2 -1.0 6.1
Total deferred tax assets 27.8 0.8 0.4 -0.4 28.6
Offset against deferred tax liabilities -0.8 -2.1 0.0 0.0 -2.9
Net deferred tax assets 27.0 -1.3 0.4 -0.4 25.8








Recognized Recognized Transfers
Deferred tax liabilities
in in other and

Jan 1, income comprehensive translation Dec 31,
EUR million 2012 statement income difference 2012
Property, plant & equipment 4.5 -0.6
-0.4 3.6
Fair value adjustments 11.5 1.5

13.0
Effects on consolidation and eliminations* 26.4 -0.3

26.0
Other temporary differences 3.5 0.9 -0.2 0.4 4.6
Total deferred tax liabilities 45.8 1.6 -0.2 0.0 47.1
Offset against deferred tax assets -0.8 -2.1 0.0 0.0 -2.9
Net deferred tax liabilities 45.0 -0.5 -0.2 0.0 44.3






Deferred tax assets (+) / liabilities (-), net -18.0


-18.5






* Consist mainly of adjustments to fair value in acquisitions.
2011
Deferred tax assets
Recognized Recognized Transfers


in in other and

Jan 1, income comprehensive translation Dec 31,
EUR million 2011 statement income difference 2011
Post-employment benefit 1.3 1.1 0.1 0.0 2.6
Provisions 8.5 1.2
0.2 10.0
Effects on consolidation and eliminations 1.3 -0.1
0.0 1.3
Property, plant & equipment 0.9 -0.2
0.0 0.7
Tax losses and tax credits carried forward 19.2 -2.9
-0.6 15.7
Valuation allowance of deferred tax assets -20.2 11.8
-0.2 -8.6
Other temporary differences 4.7 1.1 0.2 0.1 6.1
Total deferred tax assets 15.9 12.0 0.3 -0.4 27.8
Offset against deferred tax liabilities -0.7 0.0 0.0 -0.1 -0.8
Net deferred tax assets 15.2 12.0 0.3 -0.5 27.0






Deferred tax liabilities
Recognized Recognized Transfers


in in other and

Jan 1, income comprehensive translation Dec 31,
EUR million 2011 statement income difference 2011
Property, plant & equipment 4.3 0.1
0.0 4.5
Fair value adjustments 11.2 0.3

11.5
Effects on consolidation and eliminations* 30.0 -3.0
-0.6 26.4
Other temporary differences 0.9 2.5 -0.1 0.1 3.5
Total deferred tax liabilities 46.4 -0.1 -0.1 -0.4 45.8
Offset against deferred tax assets -0.7 0.0 0.0 -0.1 -0.8
Net deferred tax liabilities 45.8 -0.1 -0.1 -0.6 45.0






Deferred tax assets (+) / liabilities (-), net -30.6


-18.0






* Consist mainly of adjustments to fair value in acquisitions.


Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred taxes relate to the same fiscal authority. The Group has full control of dividend distribution in subsidiaries and therefore no deferred tax liability has been recorded. Associate Wärtsilä is a public company and its distribution of profit is tax exempt for Fiskars. Taxes relating to cash flow hedges and actuarial gains and losses have been recorded into other comprehensive income. The deferred tax on tax losses carried forward amounted to EUR 14.6 million (15.7) at the end of financial year. Deferred tax allowance is recorded to offset deferred tax assets in order to recognize the deferred tax assets only to the extent that it is probable that future taxable profits will be available. The tax losses carried forward, net of allowance will not expire in the following five years. Income taxes recorded in the income statement and in other comprehensive income are specified earlier in this note 9.