Unilever 2010 Annual Report Download - page 88

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Unilever Annual Report and Accounts 2010 85
Financial statements
6 Taxation
€ million € million € million
Tax charge in income statement
Current tax
Current year (a)
Over/(under) provided in prior years
2010
(1,479)
88
(1,391)
2009
(1,263)
151
(1,112)
2008
(1,650)
80
(1,570)
Deferred tax
Origination and reversal of temporary differences (237) (276) (271)
Changes in tax rates (2) 3 (3)
Recognition of previously unrecognised losses brought
(a) Provisions have been released following the favourable
forward
settlement of
prior year tax
96
(143)
(1,534)
audits in a number of countries, none
128
(145)
(1,257)
of which is
–
(274)
(1,844)
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 2010 2009 2008
(b)
Computed rate of tax 28 29 30
Differences due to:
Incentive tax credits (5) (6) (5)
Withholding tax on dividends 2 2 2
Adjustments to previous years (3) (3) (2)
Expenses not deductible for tax purposes 1 1 1
Other 3 3 –
Effective tax rate 26 26 26
(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.