LensCrafters 2008 Annual Report Download - page 76

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> 74 |ANNUAL REPORT 2008
8. INCOME TAXES
Income before provision for income taxes and the provision for income taxes consisted of the following
(thousands of Euro):
Income before provision for income taxes 2008 2007 2006
Italian companies 199,793 317,637 251,343
USA companies 172,609 319,154 331,035
Other foreign companies 217,468 143,890 95,799
Total income before provision
for income taxes 589,870 780,681 678,177
Provision for income taxes
Current
Italian companies 87,333 156,198 157,342
USA companies 29,975 116,785 120,681
Other foreign companies 55,985 61,742 33,206
Total provision for current income taxes 173,293 334,725 311,229
Deferred
Italian companies (7,757) (47,736) (23,016)
USA companies 39,517 (10,592) (3,392)
Other foreign companies (10,396) (2,896) (46,064)
Total provision for deferred income taxes 21,364 (61,224) (72,472)
Total taxes 194,657 273,501 238,757
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:
Year ended December 31,
2008 2007 2006
Italian statutory tax rate 31.4% 37.3% 37.3%
Aggregate effect of different rates in foreign jurisdictions (1.7)% (1.7)% (1.5)%
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% 1.1% 5.5%
Aggregate other effects 2.2% 1.5% 0.7%
Effective rate 33.0% 35.0% 35.2%
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.