9 Income taxes

Current taxes are recognized for taxes owed on income at the time the Group companies incur them.

Deferred taxes are recognized using the liability method in accordance with IAS 12 Income Taxes. Deferred tax assets and liabilities are recognized on all temporary differences between the IFRS carrying amounts and the tax accounts of consolidated entities and on consolidation measures.

Further, deferred tax assets for future economic benefits from unused tax losses and unused tax credits are taken into account if it is probable that they will be used within a defined period. As a capital-market-oriented company, the Group is pursuing a long-term business strategy that has a direct impact on the tax strategy and the forecast period.

Carl Zeiss Meditec AG falls within the scope of the regulations on global minimum taxation (“Pillar Two”), implemented in Germany in the form of the Minimum Tax Act (MinStG). Accordingly, the Company is obliged to pay a primary supplementary tax for each jurisdiction in which subsidiaries (so-called constituent entities) operate that have an effective tax rate of less than 15% and have not implemented their own OECD-compliant national supplementary tax regime (QDMTT). For fiscal year 2024/25, there is neither a primary supplementary tax for Carl Zeiss Meditec AG nor a national supplementary tax for one of the subsidiaries, as the legal conditions are not met.

The carrying amount of deferred tax assets is reviewed at every reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the deferred tax asset to be utilized. A previously unrecognized deferred tax asset is reassessed and recognized to the extent that it has become probable that future economic benefits will be recovered.

Deferred tax liabilities are recognized for the expected income tax and withholding tax on expected dividend payments by subsidiaries. No deferred tax liabilities are recognized for the retained earnings of subsidiaries, unless corresponding dividend distributions are intended in the foreseeable future.

Deferred taxes relating to items recognized in other comprehensive income are likewise recognized in other comprehensive income and not through profit or loss.

Deferred tax assets and deferred tax liabilities are offset if a Group entity has a legally enforceable right to offset current tax assets and current tax liabilities and these relate to income taxes levied by the same taxation authority on the same taxable entity. Consequently, deferred tax assets and liabilities are netted within consolidated tax groups.

Deferred taxes are determined on the basis of the tax rates that apply or are expected to apply based on the tax laws that have been enacted or substantively enacted in the individual countries at the time of realization. In Germany, a corporate income tax rate of 15.0% currently applies (prior year: 15.0%). Taking into account the solidarity surcharge and the varying trade income tax rates, companies in Germany are subject to a tax rate of 29.87% (prior year: 29.87%). The nominal tax rates outside Germany in the fiscal year range between 19.00% and 34.59% (prior year: 21.00% and 34.59%).

The Act for the creation of a tax investment program to strengthen Germany as a business location (immediate investment program), which was announced in the Federal Law Gazette on 18 July 2025 makes a revaluation of deferred taxes necessary due to the future gradual reduction in the corporation tax rate. The expected effect on deferred taxes from the gradual reduction in tax rates by 2032 was recognized in deferred tax assets in the amount of €-414k and in deferred tax liabilities in the amount of €+3,478k. This effect resulted in an increase in deferred tax of €+3,892k.

The tax rate applied for the tax reconciliation account is the nominal tax rate of the parent company, Carl Zeiss Meditec AG, Jena, of 29.87%, which applied in the past fiscal year (prior year: 29.87%). Deferred taxes on interim profits are calculated in each case using the current or future tax rate applicable for the receiving Group company. This results in a tax rate ranging from 19.00% to 34.59% (prior year: 21.00% to 34.59%). The change in the lower end of the range is the result of a tax reduction at a Dutch subsidiary, which now constitutes the new lower limit.

The tax reconciliation is as follows:

When determining the amount of deferred tax assets, key estimation-related decisions need to be made concerning the expected time of occurrence, the amount of future taxable income, and future tax planning strategies. Based on the planned business development in subsequent years, it is assumed that the deferred tax assets will retain their value.

Deferred tax assets and liabilities as of 30 September 2025 are allocated to the individual balance sheet items as follows:

Deferred tax liabilities were carried in the amount of €780k in the fiscal year under review (prior year: €934k) for net retained earnings of subsidiaries intended for disbursement in the amount of €25,073k (prior year: €40,920k). Deferred tax liabilities in the amount of €1,903k (prior year: €3,459k) on the total amount of temporary differences in connection with investments in subsidiaries in the amount of €6,167k (prior year: €11,356k) have not been recognized.

The unused tax losses mainly result from the US subsidiaries and can be used indefinitely. Loss carryforwards of a subsidiary in the US amounting to €4,185k were already written off in full in previous years, as it cannot be assumed that they will be used in the future. Deferred taxes in the amount of €6,123k on loss carryforwards were not recognized as it cannot be assumed that they will be used in the future.