ANNUAL REPORT 2005 - Lukoil

The following table is a reconciliation of the amount of income tax expense that would result from applying the Russian
statutory tax rate to income before income taxes to total income taxes:
Year ended
December 31, 2005
Year ended
December 31, 2004
Year ended
December 31, 2003
Income before income taxes 8,910 6,008 4,576
Notional income tax at Russian statutory
rates 2,138 1,442 1,098
Increase (reduction) in income tax due to:
Non-deductible items, net 407 301 168
Foreign rate differences (12) 4 (11)
Domestic rate differences (125) (23) (7)
Non-taxable gain on sale of interest in
Azeri Chirag Guneshli - - (271)
Foreign currency effect (5) 6 3
Change in valuation allowance 64 30 (1)
Other - - 28
CONSOLIDATED FINANCIAL STATEMENTS
Total income tax expense 2,467 1,760 1,007
Taxes other than income taxes were:
Year ended
December 31, 2005
Year ended
December 31, 2004
Year ended
December 31, 2003
Mineral extraction tax 5,590 2,971 1,966
Social taxes and contributions 324 330 257
Property tax 233 111 139
Other taxes and contributions 187 93 94
Taxes other than income taxes 6,334 3,505 2,456
Deferred income taxes are included in the consolidated balance sheets as follows:
As of
December 31, 2005
As of
December 31, 2004
Other current assets 52 69
Deferred income tax assets – non-current 181 138
Other current liabilities (18) (16)
Deferred income tax liabilities – non-current (1,830) (698)
Net deferred income tax liability (1,615) (507)
151