Kia 2007 Annual Report Download - page 101

101_ Kia Motors Annual Report 2007
(c) The charge (benefit) for income taxes calculated by applying statutory tax rates to the Company’s taxable income for the year differs from the actual charge
(benefit) in the statement of income for the years ended December 31, 2007 and 2006 for the following reasons:
(d) The effective tax rates, after adjustments for certain differences between amounts reported for financial accounting and income tax purposes, were
approximately 45.7% and 46.3% in 2007 and 2006, respectively.
(e) The tax effects of temporary differences that result in significant portions of deferred tax assets and liabilities at December 31, 2007 and 2006 are presented
below:
6,866
(64,669)
(24,356)
(609)
18,003
76,170
11,405
￦
￦
2007 2006
20,120
286
(78,039)
739
-
90,770
33,876
Charge (benefit) for income taxes at nominal tax rates
Tax effects of permanent differences, primarily
entertainment expenses in excess of tax limit
Investment tax credit
Adjustment of prior year tax return
Additional tax payment(*1)
Decrease in deferred income tax liabilities
resulting from equity in earnings of equity method accounted investees (*2)
Actual charge (benefit) for income taxes
In millions of Won
59,929
70,073
2,130
1,708
-
178,945
-
142,888
388,113
48,373
1,578
893,737
522
2,564
5,161
455,999
-
89
3,063
467,398
426,339
￦
￦
2007 2006
59,688
72,461
2,130
10,053
38,346
193,227
6,876
5,324
363,415
51,800
1,687
805,007
1,434
935
5,065
370,440
31
557
4,581
383,043
421,964
Deferred tax assets
Allowance for doubtful accounts in excess of tax limit
Bad debts written off
Dividend income
Loss on impairment of investments
Accrued expenses
Provision for warranties
Loss on impairment of property, plant and equipment
Net operating loss carryforward
Carryforwards of unused tax credits
Tax reserve applicable to equity
Other
Total deferred tax assets
Deferred tax liabilities
Deferred foreign exchange translation gain, net
Accumulated depreciation
Accrued income
Equity in earnings of equity method accounted investees, net
Gain on valuation of derivatives
Amortization on development costs
Tax reserve applicable to equity
Total deferred tax liabilities
Net deferred tax asset
In millions of Won
(*1) The Company was subject to a special tax investigation by the National Tax Service during 2007 related to fiscal years 2001 to 2006, resulting in additional tax payments amounting to ￦18,003 which is included in
income tax payable as of December 31, 2007.
(*2) Under the Corporate Income Tax Act Article 18 paragraph 2, a certain portion of dividend income is not taxable. Therefore, certain portions of equity in net earnings of equity method accounted investees were
considered permanent differences in estimating deferred tax assets (liabilities). Effective January 1, 2006, non-taxable dividend income is excluded from equity in income of equity method accounted investees in
estimating deferred income tax liabilities.