ArcelorMittal Annual Report 2008

Note 19: Income Tax
Income tax expense
The breakdown of the income tax expense (benefit) for each of the years ended December 31, 2007 and 2008,
respectively, is summarized as follows:
The following table reconciles the income tax expense (benefit) to the statutory tax expense as calculated:
Year ended Year ended
December 31, December 31,
2007 2008
Total current income tax expense 2,544 2,494
Total deferred tax expense (benefit) 494 (1,396)
Total income tax expense 3,038 1,098
Year ended Year ended
December 31, December 31,
2007 2008
Net income: 10,368 9,399
Minority interest 1,482 1,040
Income from investments in associates and joint ventures (985) (1,653)
Income tax expense 3,038 1,098
Income before tax and income from investments in associates and joint ventures 13,903 9,884
Tax at the domestic rates applicable to profits in the countries 3,926 1,392
Permanent items (318) (540)
Benefit arising from interest in partnership (51) (21)
Rate changes (209) (151)
Net change in measurement of deferred tax assets 103 (410)
Re-characterization of capital loss to ordinary loss — —
Benefit of tax holiday (27) (7)
Effects of foreign currency translation (297) 728
Tax deduction (105) —
Tax credits (14) (95)
Other taxes 67 177
Others (37) 25
Income tax expense 3,038 1,098
The 2008 permanent items of (540) result from deemed deductions on taxable income of (979), tax expense relating to interest
recaptures of 184, tax expense of 177 relating to non-deductible provisions and tax expense of 78 relating to other permanent items.
The 2007 permanent items of (318) result from deemed deductions on taxable income of (347), income tax expense of
98 on inter-company dividends and share transfers, and other taxable income of (69) relating to other permanent items.
The 2008 tax benefit from rate changes of (151) mainly results from the decrease of corporate income tax rates in Kazakhstan,
Luxembourg, South Africa and Russia. The 2007 tax benefit from rate changes of (209) results from the decrease of corporate
income tax rates in Canada, Czech Republic, Germany and Morocco.
The 2008 net change in measurement of deferred tax assets of (410) primarily consists of a net tax benefit of 295 for recognition
of acquired deferred tax assets and other net tax benefit of 115, mainly relating to recognized deferred tax assets for not acquired
deferred tax assets, partly offset by non-recognition of deferred tax assets for losses of the year.
The 2007 net change in measurement of deferred tax assets of 103 primarily consists of a tax benefit of 260 for acquired deferred
tax assets, a tax expense of 192 for unrecognized net operating losses relating to the legal merger of Arcelor and Mittal Steel
and other net tax expense of 171, mainly relating to deferred tax assets not recognized for losses of the year.
123
2008 Consolidated Financial Statements continued
ArcelorMittal Annual Report 2008