Siemens 2008 Annual Report Download - page 239

Notes to Consolidated Financial Statements 143
(in millions of €, except where otherwise stated and per share amounts)
consisting of interest relating to corporate debt and related hedging activities, as well as interest income on
corporate assets.
Other nancial income (expense), net mainly includes the interest component from measuring provisions
amounting to €(81) and €31 in scal 2008 and 2007, respectively.
10 Income taxes
Income (loss) from continuing operations before income taxes is attributable to the following geographic regions:
Income tax expense (benet) consists of the following:
The current income tax expense in scal 2008 and 2007 includes adjustments recognized for current tax of prior
periods in the amount of €(58) and €(44), respectively.
Of the deferred tax benet in scal 2008 and 2007, €(52) and €(72), respectively, relate to the origination and
reversal of temporary differences.
In Germany, the calculation of current tax is based on a corporate tax rate of 15% (in scal 2007: 25%) and
thereon a solidarity surcharge of 5.5% for all distributed and retained earnings. In addition to corporate taxa-
tion, trade tax is levied on prots earned in Germany. As an effect of the German Corporation Tax Reform 2008,
trade tax is a non deductible expense since 2008 resulting in an average trade tax rate of 15% and a combined
total tax rate of 31%. Deferred tax assets and liabilities are measured at tax rates that are expected to apply to
the period when the asset is realised or the liability is settled. As the German Corporation Tax Reform 2008 has
already been enacted in 2007, deferred tax assets and liabilities have been measured with the combined total
tax rate of 31% in scal 2007.
For foreign subsidiaries, current taxes are calculated based on the regulation of the national tax law and using
the tax rates applicable in the individual foreign countries. Deferred tax assets and liabilities are measured at
the tax rates that are expected to apply to the period when the asset is realised or the liability is settled.
Year ended
September 30,
2008 2007
Germany (449) 1,556
Foreign 3,323 3,545
2,874 5,101
Year ended
September 30,
2008 2007
German corporation and trade taxes 124 450
Foreign income taxes 1,001 760
1,125 1,210
Deferred tax:
Germany (212) (156)
Foreign 102 138
(110) (18)
Income tax expense 1,015 1,192