84. Notes to the consolidated financial statements continued
7. Income tax expense
Recognised in the income statement
In millions of EUR
2005
2004
Current tax expense
Current year
326
333
Under/(over) provided in prior years
(14)
10
312
343
Deferred tax expense
Origination and reversal of timing differences
(12)
(20)
Reduction in tax rate
(6)
(21)
Benefit of tax losses recognised
6
4
(12)
(37)
Total income tax expense in income statement
300
306
Profit before tax
1,169
1,039
Income from associates
(34)
(21)
Dividend income
(13)
(11)
Book profit on sale of Whitbread
(17)
Impairment other investments
6
190
2005
2004
Income tax using corporate tax rate
31.5
354
34.5
407
Effect of tax rates in foreign jurisdictions
Effect of permanent non-deductible expenses
(2.5)
2.6
(29)
30
(6.1)
2.3
(72)
27
Effect of tax incentives
(4.0)
(45)
(4.1)
(48)
Effect of tax losses utilised
0.5
6
0.4
4
Reduction of tax rates
(Over)/under provided in prior years
(0.6)
(1.2)
(6)
(14)
(1.8)
0.9
(21)
10
Other reconciling items
0.3
4
(o.i)
(1)
26.6
300
26.0
306
Deferred tax credit recognised directly in equity
In millions of EUR
2005
2004
Relating to policy changes
(12)
Relating to fair value adjustments
31
19
Heineken N.V. - Annual Report 2005