Mondelez 2012 Annual Report Download - page 441

Item 2: Tax Assumptions
Federal income tax rate: the highest marginal Federal income tax rate as adjusted for the Federal deduction of state and local taxes and the phase
out of Federal deductions under current law (or as adjusted under any subsequently enacted similar provisions of the Code).
State income tax rate: the highest adjusted marginal state income tax rate based on the Employee’s, Employee’s Spouse’s or Plan Beneficiary’s
state of residence.
Local income tax rate: the highest adjusted marginal local income tax rate based on the Employee, Employee’s Spouse’s or Plan Beneficiary’s
locality of residence.
Exceptions:
Capital Gains: the ordinary income or capital gains character of items of Assumed Grantor Trust investment income or deemed investment
income shall be taken into account where relevant.
The above principles shall generally be applied in determining tax assumptions for the relevant purpose, but Mondelē
z shall have the authority in
its discretion to alter the assumptions made where deemed appropriate to take into account particular facts and circumstances.
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(1) While the Employee is actively employed by Mondelēz, the state and local tax rate assumptions used to determine the appropriate
deduction from a Funding Payment for state and local taxes, and the appropriate amount of such taxes on Mondelēz payments to
provide for the taxes due on earnings of the Trust, will generally be based on the Employee’s work location rather than his residence.
However, status as a non
-
resident will be taken into account.
(2) In the case of an Employee who is an expatriate actively employed by Mondelēz and subject to United States taxation for all tax
purposes, income taxes shall generally be computed as follows. Expatriate taxes will be calculated assuming the highest marginal
Federal income tax rate as adjusted for the Federal deduction of state and local taxes and the phase out of Federal deductions under
current law (or as adjusted under any subsequently enacted similar provisions of the Code). The state and local tax rates will be based
on your tax state of origin.
(3) For all periods on and after the Employee’s retirement, death, disability or other termination of employment and before the
Distribution Date, state and local tax rate assumptions will generally be based on the Employee’s, Employee Spouse’s or Plan
Beneficiary’s state and locality of residence at termination of employment. At the Distribution Date, state and local tax rate
assumptions used in computing the After-Tax Benefit and the Additional Pre-
Tax Benefit, if any, will be based on actual residence at
the Distribution Date.