| PLN ‘000 | Year ended Dec 31 2008 |
Year ended Dec 31 2007 |
|---|---|---|
| (audited) | (audited) | |
| Corporate income tax | 107,577 | 205,237 |
| Deferred tax | (221,862) | (14,890) |
| Total tax | (114,285) | 190,347 |
| Income tax expense recognised in the income statement | (114,285) | 190,347 |
| Income tax expense recognised in equity | - | - |
The current portion of the income tax was calculated at the rate of 19% of the tax base.
The difference between the tax amount disclosed in the income statement and the amount calculated by applying the tax rate to pre-tax profit results from the following items:
| PLN ‘000 | Year ended Dec 31 2008 |
Year ended Dec 31 2007 |
|---|---|---|
| (audited) | (audited) | |
| Pre-tax profit/(loss) | (504,148) | 1,004,494 |
| Corporate income tax at the applicable rate (19%), including: | 83,305 | 190,854 |
| - tax on dividend at the statutory rate applicable in Poland (19%) | 202 | 311 |
| Permanent differences | (118,029) | (160,300) |
| Other differences | 513,237 | 258,278 |
| Share in investments in associated undertakings | (26,033) | (22,276) |
| Tax effect of differences | 70,143 | 14,383 |
| Corporate income tax, including | 107,577 | 205,237 |
| - tax on dividend | 202 | 311 |
| Effective tax rate | - | 0.2 |
As at December 31st 2008 and December 31st 2007, the net deferred tax asset (liability) comprised the following items:
| PLN ‘000 | Dec 31 2008 | Dec 31 2007 |
|---|---|---|
| (audited) | (audited) | |
| Deferred tax asset | ||
| Provision for employee benefits | 15,318 | 12,920 |
| Difference between current tax value and book value of fixed assets | 21,086 | 6,941 |
| Impairment losses on inventories | 40,108 | 3,145 |
| Negative valuation of derivatives | 29,339 | - |
| Tax loss amortised over time | 127,189 | 5,421 |
| Impairment losses on receivables | 16,002 | 12,155 |
| Unrealised margin assets | (6,087) | 11,995 |
| Other | 103,741 | 35,023 |
| Total deferred tax asset | 346,696 | 87,600 |
| Deferred tax liability: | ||
| Difference between current tax value and book value of fixed assets | 189,374 | 206,281 |
| Positive valuation of derivatives | 20,635 | 1,407 |
| Other | 14,875 | 2,969 |
| Total deferred tax liability | 224,884 | 210,657 |
| Net deferred tax asset/(liability) | 121,812 | (123,057) |
Since the Group companies are separate taxpayers, deferred tax asset and deferred tax liability are calculated at each company individually. Deferred tax asset and deferred tax liability are offset by the Group companies. Consequently, consolidated balance-sheets present deferred tax assets and liabilities as follows:
| PLN ‘000 | Dec 31 2008 | Dec 31 2007 |
|---|---|---|
| (audited) | (audited) | |
| Deferred tax asset: | 132,223 | 31,732 |
| Deferred tax liability: | (10,411) | (154,789) |
| Net deferred tax asset/(liability) | 121,812 | (123,057) |
Taxable temporary differences are expected to expire in 2009–2085.