sain t-gobain annu al report 2008 annual report

The effective tax rate paid by the Group under the new tax
system applicable as from 2007 is as follows:
(in %) 2007 2008
Tax rate in France 34.4 34.4
Impact of tax rates outside France (5.7) (4.7)
Provision for competition litigation
not deductible for tax purposes 8.2 4.2
Taxable capital gains (2.9) 1.8
Provision for deferred tax assets 2.1 (0.1)
Tax loss carryforwards (1.2) (0.1)
Other deferred and miscellaneous taxes 2.6 (4.7)
Effective tax rate 37.5 30.8
In the balance sheet, changes in net deferred tax liabilities
break down as follows:
(in € millions)
Net deferred tax liabilities
At January 1, 2006 702
Deferred tax expense/(benefit) 97
Changes in deferred taxes on actuarial
gains and losses recognized
in accordance with IAS 19 (Note 13) 131
Translation adjustments 31
Impact of changes
in group structure and other (87)
At December 31, 2006 874
Deferred tax expense/(benefit) 105
Changes in deferred taxes on actuarial
gains and losses recognized
in accordance with IAS 19 (Note 13) 67
Translation adjustments (12)
Impact of changes in group structure and other (85)
At December 31, 2007 949
Deferred tax expense/(benefit) (1)
Changes in deferred taxes
on actuarial gains and losses recognized
in accordance with IAS 19 (Note 13) (228)
Translation adjustments (111)
Impact of changes in group structure and other 14
At December 31, 2008 623
The table below shows the principal components
of net deferred tax liabilities:
Dec. 31, Dec. 31, Dec. 31,
(in € millions) 2008 2007 2006
Deferred tax assets 507 328 348
Deferred tax liabilities (1,130) (1,277) (1,222)
Net deferred tax liability (623) (949) (874)
Pensions 561 465 641
Brands (781) (844) (889)
Depreciation & amortization,
accelerated capital allowances
and untaxed provisions (992) (1,029) (1,127)
Tax loss carryforwards 140 97 181
Other 449 362 320
Total (623) (949) (874)
Since January 1, 2007, deferred taxes are offset at the level of
each tax entity, i.e., by tax group where applicable (France, the
United Kingdom, Spain, Germany and the United States).
Deferred tax assets of €507 million were recognized in 2008
(2007: €328 million), including €372 million in the United
States (2007: €214 million). Deferred tax liabilities recognized
in 2008 amounted to €1,130 million (2007: €1,277 million),
including €457 million in France (2007: €460 million) and
€271 million in the United Kingdom (2007: €392 million).
Deferred tax liabilities recognized in other countries
represented considerably smaller amounts.
Deferred tax assets whose recovery is not considered probable
totaled €175 million at December 31, 2008 and €198 million at
December 31, 2007.
160
Saint-Gobain – Financial Report 2008