101 08 HEINEKEN N.V. ANNUAL REPORT 2008 13. Income tax expense Recognised in the income statement In millions of EUR 2008 2007 Current tax expense Current year 352 359 Under/(over) provided in prior years (25) (17) 327 342 Deferred tax expense Origination and reversal of temporary differences 1 29 Previously unrecognised deductible temporary differences (1) (1) Changes in tax rate (2) 4 Ut lisation/(benefit) of tax losses recognised (78) (7) Urider/(over) provided in prior years 1 27 (79) 52 Total income tax expense in the income statement 248 394 Rt conciliation of the effective tax rate In illionsof EUR 2008 2007 Pr >fit before income tax 595 1,323 St ire of net profit of associates and joint ventures ar i impairments thereof 102 (54) Pr >fit before income tax excluding share of profit of associates ar d joint ventures (inclusive impairments thereof) 697 1,269 A from 2008, the share of profit of associates and joint ventures and impairments thereof has been excluded fr m the effective tax rate calculation. The dividend income from investments and gain of sale of subsidiaries ai i associates have been included. The comparatives have been adjusted accordingly. 2008 2007 In ome tax using the Company's domestic tax rate 25.5 178 25.5 324 Ef act of tax rates in foreign jurisdictions 2.3 16 0.4 5 Ef act of non-deductible expenses 16.9 118 6.3 81 Ef act of tax incentives and exempt income (9.2) (64) (1.0) (12) R' ognition of previously unrecognised temporary differences (0.1) (1) (0.2) (2) U sation or recognition of previously unrecognised tax losses (0.3) (2) (0.2) (3) U ecognised current year tax losses 3.3 23 0.7 9 Ef act of changes in tax rate (0.3) (2) 0.3 4 W hholding taxes 1.9 13 0.1 (1) U der/(over) provided in prior years (3.4) (24) 0.8 10 0 ier reconciling items (1.0) (7) (1.7) (21) 35.6 248 31.0 394 '008 the tax effect relating to the €275 million impairment on the goodwill of Russia has been included in i-deductible expenses. In 2007 the tax effect related to the fine of the European Union of €219 million has an included in non-deductible expenses. Ir ome tax relating to items (charged)/credited to equity In lillionsof EUR Note 2008 2007 anges in fair value 4 (5) anges in hedging reserve 57 18 61 (5)

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