78
10 Income taxes continued
-
-
Notes to the consolidated financial statements continued
Ahold
Annual Report 2010
Group at a glance
Performance
Governance
Financials
Investors
Effective income tax rate on continuing operations
Ahold's effective tax rates in the income statement differed from the statutory income tax rate of the Netherlands of 25.5 percent in both
2010 and 2009. The following table reconciles these statutory income tax rates with the effective income tax rates in the income statement:
2010 2009
million million
Income before income taxes 1,077 1,014
Income tax expense at statutory tax rates (275) 25.5% (259) 25.5%
Adjustments to arrive at effective income tax rates:
Rate differential (local rates versus the statutory rate of the Netherlands)
25
(2.3)%
(12)
1.2%
Deferred tax income due to changes in tax rates
4
(0.3)%
12
(1.2)%
Deferred tax income related to recognition of deferred tax assets - net
101
(9.9)%
Reserves, (non-)deductibles, and discrete items
(25)
2.3%
10
(1.0)%
Total income taxes
(271)
25.2%
(148)
14.6%
"Rate differential" indicates the effect of Ahold's taxable income being generated and taxed in jurisdictions where tax rates differ from the
statutory tax rate in the Netherlands. "Reserves, (non-)deductibles and discrete items" include one-time events such as law changes.
The deferred tax income related to the recognition of deferred tax assets in 2009 primarily arose from U.S. net operating losses carried
over from previous years.
Income taxes on discontinued operations
Current and deferred income tax related to discontinued operations amounted to an expense of €3 million in 2010 and a benefit of €50
million in 2009 and has been applied against the result from discontinued operations. Included in 2010 tax expense is €17 million in
expense related to the reversal of provisions Ahold recognized in relation to the financial obligations under various lease guarantees that
the Company had previously provided to landlords of its former BI-LO and Bruno's subsidiaries and a €17 million benefit related to Tops.
For further information, see Notes 5 and 34.
