J www.ahold.com/reports2008
Notes to the consolidated financial statements
10 Income taxes
Income taxes continuing operations
-
Effective income tax rate continuing operations
-
-
Income taxes discontinued operations
Financial statements
AHOLD ANNUAL REPORT 2008 65
The following table specifies the current and deferred tax components of income taxes on continuing operations in the consolidated
income statement:
million
2008
2007
Current income taxes
Domestic taxes
(122)
(74)
Foreign taxes:
United States
5
Europe - Other
(12)
(19)
Total current tax expense
(134)
(88)
Deferred income taxes
Domestic taxes
(33)
(43)
Foreign taxes:
United States
(59)
(27)
Europe - Other
1
5
Total deferred tax expense
(91)
(65)
Total income taxes on continuing operations
(225)
(153)
Ahold's effective tax rates in the consolidated income statement differ from the statutory income tax rate of the Netherlands
of 25.5 percent in both 2008 and 2007. The following table reconciles these statutory income tax rates with the effective income
tax rates in the consolidated income statement:
2008
2007
million
million
Income before income taxes
984
768
Income tax expense at statutory tax rates
(251)
25.5%
(196)
25.5%
Adjustments to arrive at effective income tax rates:
Rate differential (local statutory rates versus the
statutory rates of the Netherlands)
(23)
2.4%
1
(0.1)%
Deferred tax income (expense) due to changes in tax rates
(4)
0.4%
Deferred tax income (expense) related to movements
of impairment of deferred tax assets
4
(0.4)%
(16)
2.1%
Financing and related costs
57
(5.8)%
40
(5.2)%
Reserves, (non-)deductibles and discrete items
(8)
0.8%
18
(2.4)%
Total income taxes
(225)
22.9%
(153)
19.9%
Financing and related costs include the result of Ahold's intercompany finance activities, which are carried out from the Company's
Treasury Center in Geneva, Switzerland.
Income tax related to discontinued operations amounted to a benefit of EUR 14 million in 2008 and an expense of EUR 85 million
in 2007 and has been applied against income from discontinued operations. For further information, see Note 5.
