D _ Consolidated Financial Statements Income taxes relating to components of other comprehensive income The reconciling item “other effects” includes expenses of € 6 mn € mn (2020: € 17 mn) related to the write-down of deferred tax assets on 2021 2020 temporary differences and tax credits. Deferred tax income increased by Items that may be reclassified to profit or loss in future periods € 1 mn (2020: € 1 mn) due to the reversal of write-down of deferred tax Foreign currency translation adjustments 148 (155) assets on temporary differences and tax credits. Available-for-sale investments 2,489 (2,018) The tax rates used in the calculation of the Allianz Group’s Cash flow hedges 74 (26) deferred taxes are the applicable national rates, which in 2021 ranged Share of other comprehensive income of associates and joint from 10.0 % to 45.0 %, with changes to tax rates that had already been ventures 16 (16) Miscellaneous 166 (7) adopted in Argentina, Brazil, Colombia, the Netherlands, and the Items that may never be reclassified to profit or loss United Kingdom by 31 December 2021 taken into account. Changes in actuarial gains and losses on defined benefit Deferred tax assets on losses carried forward are recognized to plans 170 78 the extent to which it is more likely than not that sufficient future Total 3,063 (2,145) taxable profits will be available for realization. Entities which suffered a tax loss in either the current or the preceding period recognized deferred tax assets in excess of deferred tax liabilities amounting to The recognized income taxes for the year ended 31 December 2021 € 483 mn (2020: € 363 mn), as there was convincing other evidence are € 102 mn (2020: € 123 mn) above the expected income taxes, that sufficient future taxable profit will be available. which are determined by multiplying the respective income before income taxes with the applicable country-specific tax rates. The following table shows the reconciliation from the expected income taxes to the effectively recognized income taxes for the Allianz Group. Deferred tax assets and liabilities The Allianz Group’s reconciliation is a summary of the individual € mn company-related reconciliations, which are based on the respective As of 31 December 2021 2020 country-specific tax rates taking into consideration consolidation DEFERRED TAX ASSETS effects with an impact on the Group result. The applicable tax rate Financial assets carried at fair value through income 38 111 used in the reconciliation for domestic Allianz Group companies Investments 22,850 14,648 includes corporate tax, trade tax, and the solidarity surcharge, and Deferred acquisition costs 1,160 2,098 amounted to 31.0 % (2020: 31.0 %). Other assets 1,860 1,239 The effective tax rate is determined on the basis of the effective Intangible assets 192 221 income tax expenses on income before income taxes. Tax losses carried forward 1,589 1,544 Insurance reserves 48,632 44,215 Effective tax rate Pensions and similar obligations 5,381 5,168 € mn Other liabilities 3,079 2,141 2021 2020 Total deferred tax assets 84,780 71,383 Income before income taxes 9,520 9,604 Non-recognition or valuation allowance for deferred tax assets Applied weighted income tax rate 24.3% 24.4% on tax losses carried forward (761) (712) Expected income taxes 2,313 2,348 Effect of netting (82,110) (69,665) Trade tax and similar taxes 102 216 Net deferred tax assets 1,910 1,006 Net tax-exempt income (74) (183) DEFERRED TAX LIABILITIES Effects of tax losses (1) 27 Financial assets carried at fair value through income 969 651 Other effects 76 63 Investments 44,241 42,266 Effective income taxes 2,415 2,471 Deferred acquisition costs 6,781 7,338 Effective tax rate 25.4% 25.7% Other assets 1,881 2,336 Intangible assets 1,563 908 Insurance reserves 28,755 21,276 Pensions and similar obligations 2,996 3,023 Other liabilities 550 461 For the year ended 31 December 2021, the write-down of deferred Total deferred tax liabilities 87,736 78,260 taxes on tax losses carried forward increased the tax expenses by Effect of netting (82,110) (69,665) € 82 mn (2020: € 46 mn). The reversal of write-down of deferred tax Net deferred tax liabilities 5,626 8,595 assets on tax losses carried forward resulted in deferred tax income of Net deferred tax assets (liabilities) (3,717) (7,589) € 12 mn (2020: € 0 mn). Due to the use of tax losses carried forward, for which deferred tax assets had previously been written off, the current income tax expenses decreased by € 0 mn (2020: € 1 mn). Deferred tax income increased by € 71 mn (2020: € 19 mn) due to the use of tax losses carried forward, for which deferred tax assets had previously been written off. The aforementioned effects are shown in the reconciliation statement as “effects of tax losses”. 164 Annual Report 2021 − Allianz Group