Nokia 2008 Annual Report Download - page 187

11. Income taxes (Continued)
income taxes recognized in the consolidated income statement is reconciled as follows at
December 31, 2008:
2008 2007 2006
EURm EURm EURm
Income tax expense at statutory rate ................................ 1 292 2 150 1 488
Items without tax benefit/expense................................. (65) 61 12
Nontaxable gain on formation of Nokia Siemens Networks
(1)
........... —(489) —
Taxes for prior years ............................................ (128) 20 (24)
Taxes on foreign subsidiaries’ profits in excess of (lower than)
income taxes at statutory rates.................................. (181) (138) (73)
Operating losses with no current tax benefit ......................... —15 —
Net increase in tax provisions..................................... 250 (12)
Change in income tax rate
(2)
...................................... (22) (114) —
Deferred tax liability on undistributed earnings
(3)
..................... 220 (37) (3)
Other ........................................................ (37) 4 (31)
Income tax expense .............................................. 1 081 1 522 1 357
(1)
See Note 8.
(2)
In 2007, the change in income tax rate decreased Group tax expense primarily due to the impact
of a decrease in the German statutory tax rate on deferred tax asset balances.
(3)
The change in deferred tax liability on undistributed earnings mainly relates to changes to tax
rates applicable to profit distributions.
Certain of the Group companies’ income tax returns for periods ranging from 2002 through 2008 are
under examination by tax authorities. The Group does not believe that any significant additional
taxes in excess of those already provided for will arise as a result of the examinations.
F43
Notes to the Consolidated Financial Statements (Continued)