ING Direct 2008 Annual Report Download - page 173

46 TAXATION
Taxation by type
Netherlands International Total
2008 2007 2006 2008 2007 2006 2008 2007 2006
Current taxation –329 112 469 863 963 970 534 1,075 1,439
Deferred taxation –122 144 95 –1,133 316 373 –1,255 460 468
–451 256 564 –270 1,279 1,343 –721 1,535 1,907
Reconciliation of the weighted average statutory income tax rate to ING Group’s effective income tax rate
2008 2007 2006
Result before taxation –1,487 11, 043 9,940
Weighted average statutory tax rate 49.9% 28.7% 30.9%
Weighted average statutory tax amount –742 3,169 3,071
Associates exemption 69 –814 –255
Other income not subject to tax –210 –577 –336
Expenses not deductible for tax purposes 106 93 121
Impact on deferred tax from change in tax rates –25 –9 –170
Deferred tax benefit from previously unrecognised
amounts –64 –30
Current tax benefit from previously unrecognised
amounts –222 –447
Write down/reversal of deferred tax assets 360 8–6
Adjustment to prior periods –279 –49 – 41
Effective tax amount –721 1,535 1,907
Effective tax rate 48.5% 13.9% 19.2%
The weighted average statutory tax rate increased significantly in 2008 compared to 2007 caused by the fact that most of the losses in
2008 were incurred in high tax jurisdictions.
The effective tax rate in 2008 was slightly lower than the weighted average statutory tax. Main reasons for this are tax exempt income
and releases of tax provisions, partly offset by non deductible expenses and a reduction of the deferred tax assets.
47 EARNINGS PER ORDINARY SHARE
Earnings per ordinary share
Amount
(in millions of euros)
Weighted average
number of ordinary shares
outstanding during the period
(in millions)
Per ordinary share
(in euros)
2008 2007 2006 2008 2007 2006 2008 2007 2006
Basic earnings –729 9,241 7,692 2,042.7 2,141.1 2,155.0 –0.36 4.32 3.57
Attribution to non-voting equity securities –425
Earnings – after attribution to non-voting equity
securities –1,154 9,241 7,692 2,042.7 2,141.1 2,155.0 –0.56 4.32 3.57
Effect of dilutive securities:
Non-voting equity securities 425
Warrants 3.2 7.6
Stock option and share plans 0.8 12.3 14.4
0.8 15.5 22.0
Diluted earnings –729 9,241 7,692 2,043.5 2,156.6 2,177.0 –0.36 4.28 3.53
Diluted earnings per share data are computed as if the stock options and warrants outstanding at year-end had been exercised at the
beginning of the period. It is also assumed that ING Group uses the cash received from exercised stock options and warrants exercised or
non-voting equity securities converted to buy its own shares against the average market price in the financial year. The net increase in the
number of shares resulting from exercising warrants and stock options or converting non-voting equity securities is added to the average
number of shares used for the calculation of net earnings per share.
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ING Group Annual Report 2008