11 Income taxes
millions of CHF | 2025 | 2024 | ||
Current income tax expenses | –9.5 | –8.5 | ||
Deferred income tax income | 7.6 | 8.5 | ||
Total income tax expenses | –1.9 | –0.0 |
For the reconciliation of the income tax expenses, the group used the weighted average tax rate for the group tax rate. The weighted average tax rate results from applying each subsidiary’s statutory income tax rate to the income before taxes based on absolute values (that is, making all values positive). Since the group operates in countries that have differing tax laws and rates, the consolidated weighted average effective tax rate will vary from year to year according to variations in income per country and changes in applicable tax rates.
Reconciliation of income tax expenses
millions of CHF | 2025 | 2024 | ||
Income before income tax expenses | 9.0 | –6.3 | ||
Group tax rate | 18.8% | 20.4% | ||
Income taxes at group tax rate | –1.7 | 1.3 | ||
Income taxed at different tax rates | 1.1 | 1.3 | ||
Effect of tax loss carryforwards and allowances for deferred income tax assets | –3.1 | –4.4 | ||
Expenses not deductible for tax purposes | –0.4 | –0.1 | ||
Effect of changes in tax rates and legislation | 0.8 | 0.1 | ||
Prior-year items and others | 1.4 | 1.7 | ||
Total income tax expenses | –1.9 | –0.0 | ||
Effective income tax rate | 21.6% | –0.7% |
The effective income tax rate for 2025 is 21.6%. The effect of income taxed at different rates in the amount of CHF 1.1 million mainly reflects the impact of subsidiaries operating in jurisdictions where local statutory tax rates differ from the tax rate used by the group for the tax reconciliation. In addition, the effective income tax rate in 2025 was negatively impacted by the non-recognition of tax loss carryforwards of CHF 3.1 million. “Prior-year items and others” of CHF 1.4 million consists partially of prior-year adjustments in group entities in the UK, Spain and China.
The effective income tax rate for 2024 was -0.7%. The effect of income taxed at different tax rates in the amount of CHF 1.3 million consists partially of a tax-deductible impairment of an investment in subsidiaries and associates. In addition, the effective income tax rate in 2024 was negatively impacted by the non-recognition of tax loss carryforwards of CHF 4.4 million. “Prior-year items and others” of CHF 1.7 million consists partially of prior-year adjustments in group entities in Germany and China.
Income tax liabilities
millions of CHF | 2025 | 2024 | ||
Balance as of January 1 | 13.9 | 12.7 | ||
Additions | 9.5 | 8.5 | ||
Utilized | –6.6 | –7.6 | ||
Currency translation differences | –0.8 | 0.3 | ||
Total income tax liabilities as of December 31 | 15.9 | 13.9 | ||
– thereof current | 15.9 | 13.9 |
Summary of deferred income tax assets and liabilities in the balance sheet
2025 | ||||||
millions of CHF | Assets | Liabilities | Net | |||
Intangible assets | 0.1 | –15.1 | –15.0 | |||
Property, plant and equipment | 1.3 | –4.0 | –2.8 | |||
Financial assets | – | –0.1 | –0.1 | |||
Defined benefit assets | – | –3.2 | –3.2 | |||
Inventory | 3.3 | –0.3 | 2.9 | |||
Other assets | 0.4 | –5.6 | –5.3 | |||
Defined benefit obligations | – | – | – | |||
Non-current provisions | 0.1 | – | 0.1 | |||
Current provisions | 2.5 | –0.1 | 2.4 | |||
Other liabilities | 6.3 | –0.2 | 6.1 | |||
Tax loss carryforwards | 18.4 | – | 18.4 | |||
Tax assets / liabilities | 32.4 | –28.6 | 3.7 | |||
Offset of assets and liabilities | –12.9 | 12.9 | – | |||
Net recorded deferred income tax assets and liabilities | 19.5 | –15.7 | 3.7 | |||
2024 | ||||||
millions of CHF | Assets | Liabilities | Net | |||
Intangible assets | 1.0 | –18.6 | –17.6 | |||
Property, plant and equipment | 1.5 | –3.2 | –1.7 | |||
Financial assets | – | – | – | |||
Defined benefit assets | – | –1.9 | –1.9 | |||
Inventory | 2.8 | –0.2 | 2.6 | |||
Other assets | 0.4 | –5.3 | –4.9 | |||
Defined benefit obligations | 0.4 | – | 0.4 | |||
Non-current provisions | 0.1 | – | 0.1 | |||
Current provisions | 3.2 | –0.2 | 3.0 | |||
Other liabilities | 6.2 | –0.1 | 6.1 | |||
Tax loss carryforwards | 12.7 | – | 12.7 | |||
Tax assets / liabilities | 28.4 | –29.5 | –1.1 | |||
Offset of assets and liabilities | –13.0 | 13.0 | 0.0 | |||
Net recorded deferred income tax assets and liabilities | 15.4 | –16.5 | –1.1 | |||
Cumulative deferred income taxes recorded in equity (other comprehensive income) as of December 31, 2025, amounted to CHF 4.5 million (2024: CHF 2.0 million).
The group does not recognize any deferred taxes on investments in group entities because it controls the dividend policy of its entities, i.e., the group controls the timing of reversal of the related taxable temporary differences and management is satisfied that no material amounts will reverse in the foreseeable future. The aggregate amount of unrecognized temporary differences associated with investments in subsidiaries amounted to CHF 139.9 million (December 31, 2024: CHF 111.3 million), resulting in unrecognized deferred tax liabilities of CHF 7.3 million (December 31, 2024: CHF 5.6 million).
Movement of deferred income tax assets and liabilities in the balance sheet
2025 | ||||||||||||
millions of CHF | Balance as of January 1 | Recognized in profit or loss | Recognized in other comprehensive income | Acquisition of entities | Currency translation differences | Balance as of December 31 | ||||||
Intangible assets | –17.6 | 2.6 | – | – | 0.0 | –15.0 | ||||||
Property, plant and equipment | –1.7 | –1.0 | – | – | –0.0 | –2.8 | ||||||
Financial assets | 0.0 | –0.1 | – | – | – | –0.1 | ||||||
Defined benefit assets | –1.9 | –1.4 | – | – | –0.0 | –3.2 | ||||||
Inventory | 2.6 | 0.4 | – | – | –0.0 | 2.9 | ||||||
Other assets | –4.9 | –0.2 | – | – | –0.2 | –5.3 | ||||||
Defined benefit obligations | 0.4 | 1.8 | –2.2 | – | – | – | ||||||
Non-current provisions | 0.1 | 0.1 | – | – | – | 0.1 | ||||||
Current provisions | 3.0 | –0.7 | – | – | 0.1 | 2.4 | ||||||
Other liabilities | 6.1 | 0.4 | –0.3 | – | –0.1 | 6.1 | ||||||
Tax loss carryforwards | 12.7 | 5.7 | – | – | –0.0 | 18.4 | ||||||
Total | –1.1 | 7.6 | –2.6 | – | –0.2 | 3.7 | ||||||
2024 | ||||||||||||
millions of CHF | Balance as of January 1 | Recognized in profit or loss | Recognized in other comprehensive income | Acquisition of entities | Currency translation differences | Balance as of December 31 | ||||||
Intangible assets | –20.2 | 2.8 | – | – | –0.2 | –17.6 | ||||||
Property, plant and equipment | –0.7 | –1.0 | – | – | – | –1.7 | ||||||
Financial assets | 0.9 | –0.9 | – | – | 0.0 | 0.0 | ||||||
Defined benefit assets | – | –1.9 | – | – | – | –1.9 | ||||||
Inventory | 1.8 | 0.8 | – | – | – | 2.6 | ||||||
Other assets | –4.0 | –0.9 | – | – | 0.1 | –4.9 | ||||||
Defined benefit obligations | –2.1 | 2.4 | 0.2 | – | –0.0 | 0.4 | ||||||
Non-current provisions | 0.1 | –0.0 | – | – | – | 0.1 | ||||||
Current provisions | 2.3 | 0.9 | – | – | –0.1 | 3.0 | ||||||
Other liabilities | 4.2 | 0.9 | 0.9 | – | 0.1 | 6.1 | ||||||
Tax loss carryforwards | 7.0 | 5.5 | – | – | 0.2 | 12.7 | ||||||
Total | –10.7 | 8.5 | 1.1 | – | –0.0 | –1.1 | ||||||
Tax loss carryforwards (TLCF)
2025 | ||||||||||
millions of CHF | Amount | Potential tax assets | Valuation allowance | Carrying amount | Unrecognized TLCF | |||||
Expiring in the next 3 years | 1.7 | 0.4 | –0.4 | –0.0 | 1.7 | |||||
Expiring in 4–7 years | 10.1 | 1.0 | –0.1 | 0.9 | 0.4 | |||||
Available without limitation | 100.8 | 26.5 | –8.9 | 17.5 | 34.1 | |||||
Total tax loss carryforwards as of December 31 | 112.6 | 27.9 | –9.4 | 18.4 | 36.2 | |||||
2024 | ||||||||||
millions of CHF | Amount | Potential tax assets | Valuation allowance | Carrying amount | Unrecognized TLCF | |||||
Expiring in the next 3 years | – | – | – | – | – | |||||
Expiring in 4–7 years | 1.7 | 0.4 | –0.4 | 0.0 | 1.7 | |||||
Available without limitation | 74.3 | 19.5 | –6.8 | 12.7 | 25.3 | |||||
Total tax loss carryforwards as of December 31 | 76.0 | 19.9 | –7.2 | 12.7 | 26.9 | |||||
Deferred income tax assets are recognized for tax loss carryforwards to the extent that the realization of the related tax benefit through future taxable profits is probable. No deferred income tax assets have been recognized on tax loss carryforwards in the amount of CHF 36.2 million (2024: CHF 26.9 million).
The utilization of deferred tax assets on unused tax losses depends on future taxable profits exceeding the profits arising from the reversal of existing taxable temporary differences. Some entities that have recognized deferred tax assets amounting to CHF 18.4 million as of December 31, 2025 (CHF 12.7 million in 2024), have incurred losses in the current and/or preceding periods in the tax jurisdictions to which the deferred tax assets relate. The group has analyzed estimated future taxable profits and considers it probable that future taxable profit will be available in the coming years against which these tax losses can be recognized.
As part of the OECD BEPS 2.0 project, Switzerland, along with some 140 other countries, has made a commitment to implement the OECD global minimum tax (also referred to as Pillar Two legislation). In certain jurisdictions in which the group operates, Pillar Two legislation was enacted from January 1, 2024. The rules apply to multinational groups with total consolidated revenue of EUR 750 million or more in at least two of the four preceding years. Based on this, the legislation does not apply to the group, as the group’s consolidated revenue is below this threshold. Therefore, the group is not expecting any exposure to Pillar Two top-up taxes in the foreseeable future. However, medmix is monitoring the situation very closely.