Annual report 2011 - VTB

VTB BankNotes to the Consolidated Financial Statements – 31 December 2011 and 2010(in billions of Russian Roubles)33. Income TaxIncome tax expense and income tax recovery comprise the following:2011 2010Current tax expense 24.1 24.5Deferred taxation movement due to the origination and reversal of temporarydifferences 0.9 (8.2)Income tax expense for the year 25.0 16.3The income tax rate applicable to the majority of the Group’s income in 2011 is 20% (2010: 20%). The income taxrate applicable to subsidiaries’ income ranges from 10% to 32% in 2011 (2010: 10% to 32%).2011 2010IFRS profit before taxation 115.5 71.1Theoretical tax expense at the applicable statutory rate of each companywithin the Group 24.9 14.1Tax effect of items, which are not deductible or assessable for taxationpurposes:- Change in unrecognized deferred taxes (1.9) (0.4)- Non-deductible expenses 4.4 2.8- Unrecognized deferred tax effect related to investments in subsidiaries andassociates – 0.2- Adjustments recognized in the period for current tax of prior periods 0.3 0.4- Income, which is exempt from taxation (0.2) (0.1)- Income taxed at different rates (3.8) (0.1)- Income recorded in tax books only 0.1 –- Effect of change in tax rates 0.2 0.1- Other 1.0 (0.7)Income tax expense for the year 25.0 16.3The difference between the theoretical and actual income tax expense for 2011 is mainly attributable to nondeductibleexpenses and income taxed at different rates (for 2010 is mainly attributable to non-deductible expenses).47