Unilever 2008 Annual Report Download - page 98

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Notes to the consolidated accounts Unilever Group
Unilever Annual Report and Accounts 2008 95
Financial statements
6 Taxation
€ million € million € million
Tax charge in income statement 2008 2007 2006
Current tax
Current year (1 650) (1 118) (1 171)
Over/(under) provided in prior years(a) 80 226 206
(1 570) (892) (965)
Deferred tax
Origination and reversal of temporary differences (271) (261) (171)
Changes in tax rates (3) 21 (15)
Utilisation of unrecognised losses brought forward – 4 5
(274) (236) (181)
(1 844) (1 128) (1 146)
(a) Provisions have been released following the favourable settlement of prior year tax audits in a number of countries, none of which is
individually material.
The reconciliation between the computed weighted average rate of income tax expense, which is generally applicable to Unilever companies,
and the actual rate of taxation charged is as follows:
%%%
Reconciliation of effective tax rate 2008 2007 2006
Computed rate of tax(b) 30 29 31
Differences due to:
Incentive tax credits (5) (6) (7)
Withholding tax on dividends 221
Adjustments to previous years (2) (5) (4)
Expenses not deductible for tax purposes 122
Other ––1
Effective tax rate 26 22 24
(b) The computed tax rate used is the average of the standard rate of tax applicable in the countries in which Unilever operates, weighted by
the amount of profit before taxation generated in each of those countries. For this reason the rate may vary from year to year according to
the mix of profit and related tax rates.