Countries
Create and manage country
This overview dialogue shows all countries created in the selected period. The main country attributes, such as tax rates and FX rate are displayed in a table:
By clicking the Create button, you can add a new land in the selected period. Country attributes to be defined are described later in the manual.
It is necessary to create countries, in order to create companies. Every company is assigned to a certain country and uses its tax rates to calculate current and deferred taxes.
General information
The following attributes have to be defined when adding a new country:
Country ID
ID is used for a unique identification of a country. Up to three characters can be used; an ID can be assigned only once; a subsequent change is not possible.
It is recommended to use the abbreviations in accordance with ISO 3166-1-ALPHA-2 for country IDs (two-letter country codes, e.g. DE, GB, FR). Regions or specific demands on tax rates can be created using for e.g. US1, US2, US3, (…).
Tax template
Tax template defines the structure of the dialogue used for calculation of current taxes in Company. If tax calculation for a certain country is defined in the master data dialogue Toolbox, leave the default tax template (---), which is preselected.
If you select tax template Germany, tax detail dialogues appear; they can be used for calculation of current taxes. Further details will be described later in this manual.
Tax rates
Corporate tax rate
This tax rate is used for calculation of German corporate tax or corporate income tax. This information is relevant for all countries in the GTC.
This value is used only for calculation of current taxes. It does not apply to the calculation of deferred taxes.
Local tax rate
It is important to distinguish here between Germany and other countries. For other countries: it is also possible to enter a zero value if no local income tax has to be payed or if it is not relevant for the GTC.
Germany
Enter basic federal rate of 3.5% (section 11(2) of Trade Tax Act (GewStG)) into this field. The basic federal rate is multiplied by calculated in the GTC trade income. The resulting base value is multiplied by local tax rate of a company in order to determine the final trade tax. Local tax rate is administered individually for every company (in the master data dialogue Company).
Other countries
For other countries this value is used for local foreign income tax (local tax). You can enter a tax rate into the column Trade Tax (local tax) in the Current Taxes dialogue in order to consider regional differences. If a local tax rate is entered in the master data dialogue Company, this value will be displayed as a proposed value.
Overall current tax rate
Identifies an overall current tax rate for the current year. This is the sum of the corporate tax and the local tax.
This tax rate is used for calculations in the TRR line Expected income tax expenses/earnings. Difference between the country tax rate of the parent company and the country tax rate multiplied by earnings before tax represents TRR reconciliation item. This will be discussed in detail later in this manual.
Overall deferred tax rate
Identifies a tax rate used for calculation of deferred taxes. This tax rate generally corresponds to the average tax rate for the current year and/or the sum of two types of income tax (corporate tax and trade tax).
A deviation between the average tax rate for deferred taxes and average tax rate (current year) can result from the change (future) of the country tax rate. The IAS 12 underlying liability method applies to the future tax rate.
Deferred tax rate local tax
Specify here how much of the average tax rate of the deferred tax applies to the trade tax (local income tax). The difference between both tax rates is applicable to corporate tax (Germany incl. solidarity tax).
This information is especially relevant for German partnerships. It is ensured, for example, that the share of deferred tax for the corporate tax attributable to an external shareholder will not be displayed in the group. In addition, the trade tax share of the deferred tax rate is used in the 'LCF' dialogue as a proposed value for calculation of deferred taxes on the trade tax loss carry forward.
Additional tax rate
Here you should enter solidarity tax relevant for Germany (5.5%). If a country has a different tax law, data entries in this field do not result in any calculations in the GTC.
Theoretical background: tips on tax rates
Below you will find different (made up) examples and their representation in the Countries dialogue.
Example 1: tax rates of a German corporation
An example GmbH (parent company) is based in a community with a local tax rate in the amount of 420%. The corporate tax rate amounts to 15%, additional tax rate to 5.5% and the local tax rate is 3.5%. Tax rates correspond to a combined corporate tax rate that is why in this example they represent the reference rates when creating a country (Germany). 
In the Company dialogue for a GmbH enter 420% in the Local tax rate row:
When creating other German companies different local tax rates are taken into account in every individual data set in the Company dialogue. This can result in a difference to the average tax rate according to corporate tax rate. This deviation automatically leads to reconciliation item in the TRR (deviation from the corporate tax rate).
Example 2: deviating deferred tax rate
The corporate tax rate for the current business year 2014 amounts to 20%. The parliament of the country approved an increase of the corporate tax rate by 5% to 25%. The corresponding law was passed in December 2014 by the parliament and it has to be obeyed starting from the subsequent business year.
Current taxes have to be calculated with the tax rate of 20% in the business year 2014. For deferred taxes the tax rate of 25% applies. Thus the accrued effect of deferred taxes is taken into account. In addition, IAS 12 underlying liability method applies to the future tax rate. 
For IFRS the new tax rate according to IAS 12.46 has to be enacted or substantively enacted. Different thresholds apply to each country. In Germany, for example, Federal Council of Germany (Bundesrat) has to pass the relevant law, the signature of the Federal President is not required.
Eventual TRR effects that result from the change of tax rate for deferred taxes are calculated automatically by the GTC.
Example 3: local tax rate for foreign companies
The corporate tax rate amounts to 20%, local tax rate (identical tax base) to 8%. A change of future tax rate is not foreseeable. 
To enable the calculation of local taxes in the toolbox, activate the Local tax' column in Toolbox option in the Company dialogue for the selected company.
FX Code
Euro is preselected in the GTC as a standard currency:
A standard currency code is used in the FX Code entry field to identify a foreign currency. Usually, it has to be a three-symbol FX code (acc. ISO 4217, e.g. EUR, USD), max. 10 symbols can be used.
Exchange rates have to match the consolidation system. Otherwise, there can be differences between the GTC and the source system. Therefore it is recommended to import exchange rates from the source system (also as Excel CSV file).
Indirect quotation is used to specify the exchange rate (e.g. USD: 1.32814 - is price in USD for one EUR).
Avg FX rate (RC to LC)
Average foreign exchange rate is used for conversion of income statement effects of deferred taxes.
FX rate (cut-off date, RC to LC)
The cut-off date FX rate is used to convert balance sheet items.
The difference from foreign currency translation is charged or credited to currency difference of equity item in consolidated financial statement. Exchange rates are also used for reports.
Currency with decimal places
Activate this checkbox if the company values assigned to a country should be displayed with decimal places in the GTC dialogues. This option is enabled by default.
Country names in other languages
Language settings for the GTC can be made in the Home dialogue. In order to view data sets in other languages, this data sets have to be created first. Otherwise, when trying to view a data set originally created in German in other language, only a country ID is shown, the field 'Country Name' remains empty. 
The table area (see the figure above) with a language name appears in the Country dialogue only after clicking Create button.