Nokia 2009 Annual Report Download - page 219

11. Income taxes (Continued)
The differences between income tax expense computed at statutory rate (in Finland 26%) and income
taxes recognized in the consolidated income statement is reconciled as follows at December 31, 2009:
2009 2008 2007
EURm EURm EURm
Income tax expense at statutory rate ................................. 250 1 292 2 150
Permanent differences ........................................... (96) (65) 61
Nontaxable gain on the formation of Nokia Siemens Networks
(1)
......... —— (489)
Non tax deductible impairment of Nokia Siemens Networks’ goodwill
(2)
.... 236 ——
Taxes for prior years ............................................. (17) (128) 20
Taxes on foreign subsidiaries’ profits in excess of (lower than) income taxes
at statutory rates .............................................. (145) (181) (138)
Change in losses and temporary differences with no tax effect
(3)
.......... 577 —15
Net increase (decrease) in tax contingencies
(4)
........................ (186) 250
Change in income tax rates ....................................... 4(22) (114)
Deferred tax liability on undistributed earnings
(5)
...................... 111 220 (37)
Other ......................................................... (32) (37) 4
Income tax expense ............................................... 702 1 081 1 522
(1)
see note 8
(2)
see Note 7
(3)
In 2009 this item primarily relates to Nokia Siemens Networks’ losses and temporary differences
for which no deferred tax was recognized.
(4)
see Note 26
(5)
In 2008 and 2007 the change in deferred tax liability on undistributed earnings mainly related to
changes to tax rates applicable to profit distributions.
Certain of the Group companies’ income tax returns for periods ranging from 2003 through 2009 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45
Notes to the Consolidated Financial Statements (Continued)