Financial statements I Notes to the consolidated financial statements continued
13. Income tax expense :ontinued
Reconciliation of the effective tax rate
2011
Profit before income tax
2,025
1,982
Share of net profit of associates and joint ventures and impairments thereof
(240)
(193)
Profit before income tax excluding share of profit of associates
and joint ventures (inclusive impairments thereof)
1,785
1,789
2011
Income tax using the Company's domestic tax rate
25.0
446
25.5
456
Effect of tax rates in foreign jurisdictions
3.5
62
1.9
34
Effect of non-deductible expenses
3.2
58
4.0
72
Effect of tax incentives and exempt income
(6.0)
(107)
(8.2)
(146)
Recognition of previously unrecognised temporary differences
(0.5)
(9)
(0.1)
(2)
Utilisation or recognition of previously unrecognised tax losses
(0.3)
(5)
(1.2)
(21)
Unrecognised current year tax losses
1.0
18
0.8
15
Effect of changes in tax rate
0.1
1
0.2
3
Withholding taxes
1.5
26
1.4
25
Undercover) provided in prior years
(1.5)
(27)
(2.3)
(42)
Other reconciling items
0.1
2
0.5
9
26.1
465
22.5
403
Comparatives have been adjusted due to the accounting policy change in employee benefits (see note 2e)
The reported tax rate is 26.1 percent (2010:22.5 percent) and includes the effect of the release of tax provisions after having reached agreement
with the tax authorities, mainly explaining the under/over provided amount as part of the current tax expense. The reported 2010 tax rate included
the tax-exempt transfer of PT Multi Bintang Indonesia (MBI) and Grande Brasserie de Nouvelle-Caledonie S.A. (GBNC).
Income tax recognised in other comprehensive income
In millions of EURNote20112010
Changes in fair value - (5)
Changes in hedging reserve 13 (38)
Changes in translation reserve 11
Other 16 (38)
24 AO(81)
102
Heineken N.V. Annual Report 2011