LensCrafters 2007 Annual Report Download - page 144

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NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS | 143 <
8. INCOME TAXES
Income before provision for income taxes and the provision for income taxes consisted of the
following:
The Italian statutory tax rate is the result of two components: national (“IRES”) and regional (“IRAP”)
tax. IRAP could have a substantially different base for its computation than IRES.
Reconciliation between the Italian statutory tax rate and the effective tax rate is as follows:
In 2005, the Company elected, under newly established tax regulations in Italy, to step-up the tax
basis of certain assets, net of certain tax amounts the Company paid in that period.
In 2006, the Australian subsidiaries of the Company elected to apply a new tax consolidation
regime, which was introduced by the Australian government. By electing such new consolidation
regime for tax purposes, certain intangible and fixed assets were revaluated for tax purposes
increasing their tax basis. The increase in the tax basis became effective in 2006 upon filing the final
2005 tax return in December 2006.
Years ending December 31 (Euro/000) 2007 2006 2005
Income before provision for income taxes
Italian companies 317,637 251,343 216,438
US companies 319,154 331,035 244,050
Other foreign companies 143,890 95,799 78,821
Total income before provision for income taxes 780,681 678,177 539,309
Provision for income taxes
• Current
Italian companies 156,198 157,342 127,730
US companies 116,785 120,681 120,784
Other foreign companies 61,742 33,206 40,855
Total provision for current income taxes 334,725 311,229 289,369
• Deferred
Italian companies (47,736) (23,016) (74,874)
US companies (10,592) (3,392) (14,295)
Other foreign companies (2,896) (46,065) (934)
Total provision for deferred income taxes (61,224) (72,473) (90,103)
Total taxes 273,501 238,757 199,266
Year ended December 31 2007 2006 2005
Italian statutory tax rate 37.3% 37.3% 37.3%
Aggregate effect of different rates in foreign jurisdictions (1.7%) (1.5%) 1.7%
Aggregate Italian tax benefit - net (4.1%)
Aggregate effect of asset revaluation in Australia (6.8%)
Aggregate effect of Italian restructuring (5.3%)
Aggregate effect of change in tax law in Italy 2.1%
Effect of non-deductible stock-based compensation 1.1% 5.5% 3.0%
Aggregate other effects 1.5% 0.7% (0.9%)
Effective rate 35.0% 35.2% 37.0%