Economic and Financial Report - Grupo ACS

22.2 Consolidated Financial Statements
Economic and Financial Report
2.2.1.27.4 Detail of income tax expense
The detail of the corporation tax expense is as follows:
Thousands of Euros
2007 2006
Current income tax expense (table 27,3) 512,019 347,553
Deferred tax expense 14,292 3,549
Deferred tax income (2,355) (1,146)
Expense/(Income) relating to adjustments to current tax 20,093 6,149
Expense/(Income) relating to adjustments to prior years' tax (18,290) 2,692
Expense/(Income) relating to the effect of legislative changes on deferred taxes 3,284 17,077
(Income) arising from the application of prior years' deferred tax assets (27,231) (13,253)
Expense arising from deferred tax assets generated in the year 11,282 2,343
Ending corporation tax expense balance 513,094 364,964
Adjustment of tax rate
Law 35/2006, of 28 November, on personal income tax, partially amending the corporation tax, non-resident
income tax and wealth tax laws, provides inter alia, a reduction over two years of the general corporation tax rate
which up to 31 December 2006 was 35%. This tax rate is to be adjusted as follows:
Taxation periods commencing on
Typo of gravement
1 January 2007 32.5 %
1 January 2008 30 %
Accordingly, in 2006, taking into account the year in which the corresponding reversal will foreseeably be made,
the Group has estimated the amount of its deferred tax assets and liabilities, as well as the tax assets recorded in
the balance sheet. Consequently, an increase in corporate income tax amounting to EUR 17,077 thousand was
recorded in 2006 under the ”Corporation Tax Expense” in the income statement.
Furthermore, in 2006 the deferred tax liabilities of Unión Fenosa, S.A. amounting to EUR 55,938 thousand and of
Abertis Infraestructuras, S.A. amounting to EUR 34,959 thousand were adjusted by 5% (from 35% to 30%) These
adjustments were recorded under "Profit of Associates" in the income statement (Note 10). These tax liabilities are
tied to the fair value assigned to the identifiable net assets in the purchase of both companies, as part of the
difference in the purchase price and the carrying amount of these companies in the financial statements.
Consequently, there was no material effect in 2007.
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