41. Corporate Income Tax

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.