Financial statements / Notes to the consolidated financial statements / Note 12
12. Income tax expense
Recognised in the income statement
| In millions of EUR |
2006 |
2005 |
| Current tax expense |
| Current year |
439 |
326 |
| Over provided in prior years |
(26) |
(14) |
| 413 |
312 |
| Deferred tax expense |
| Change in previously unrecognised temporary differences |
(55) |
– |
| Origination and reversal of temporary differences |
(6) |
(12) |
| Change in tax rate |
10 |
(6) |
| Charge of tax losses recognised |
3 |
6 |
| (48) |
(12) |
| Total income tax expense in income statement |
365 |
300 |
Reconciliation of effective tax rate
|
| |
| Profit before income tax |
1,710 |
1,169 |
| Net gain on sale of subsidiaries, joint ventures and associates |
(18) |
(5) |
| Income from associates |
(27) |
(29) |
| Dividend income |
(13) |
(13) |
| Impairment other investments |
– |
6 |
| Taxable profit |
1,652 |
1,128 |
| |
% |
2006 |
% |
2005 |
| Income tax using the Company’s domestic tax rate |
29.6 |
489 |
31.5 |
354 |
| Effect of tax rates in foreign jurisdictions |
(3.0) |
(50) |
(2.5) |
(29) |
| Effect of non-deductible expenses |
2.4 |
40 |
2.6 |
30 |
| Effect of tax incentives and exempted income |
(3.2) |
(53) |
(4.0) |
(45) |
| Change in previously unrecognised temporary differences |
(3.3) |
(55) |
– |
– |
| Effect of recognition of previously unrecognised tax losses |
(0.3) |
(4) |
(0.1) |
(1) |
| Current-year losses for which no deferred tax asset was recognised |
0.4 |
7 |
0.6 |
7 |
| Effect of change in tax rates |
0.6 |
10 |
(0.6) |
(6) |
| (Over)/under provided in prior years |
(1.6) |
(26) |
(1.2) |
(14) |
| Other reconciling items |
0.4 |
7 |
0.3 |
4 |
| 22.0 |
365 |
26.6 |
300 |
Deferred tax (debit)/credit recognised directly in equity
| In millions of EUR |
2006 |
2005 |
| Relating to accounting policy changes |
– |
(12) |
| Relating to fair value adjustments and cash flow hedges |
(14) |
31 |
| (14) |
19 |
