Management Report - Beursgorilla

ArcelorMittal Annual Report 200958 Consolidated Financial StatementsNotes to the Consolidated Financial Statements continuedArcelorMittal and Subsidiaries(millions of U.S. dollars, except share and per share data)The 2008 permanent items of (544) resultfrom deemed deductions on taxable incomeof (979), tax expense relating to interestrecaptures of 184, tax expense of 177relating to non-deductible provisions andtax expense of 74 relating to otherpermanent items.The 2009 permanent items of (1,325)result from deemed deductions on taxableincome of (1,149), tax profit of (131)relating to tax exempt reversal on provisionfor litigation, tax profit of (99) relating totax deductible capital loss on sale of sharesand tax expense of 54 relating to otherpermanent items.The 2008 tax benefit from rate changesof (151) mainly results from the decreaseof corporate income tax rates inKazakhstan, Luxembourg, South-Africaand Russia.The 2008 net change in measurementof deferred tax assets of (410) primarilyconsists of a net tax benefit of 295 forrecognition of acquired deferred tax assetsand other net tax benefit of 115, mainlyrelating to recognized deferred tax assetsfor not acquired deferred tax assets, partlyoffset by non-recognition of deferred taxassets for losses of the year.The 2009 net change in measurementof deferred tax assets of 230 primarilyconsists of tax expense of 467 due to notrecognizing certain deferred tax assets in2009 offset by additional recognition ofdeferred tax assets for losses of previousyears of (161) and other items of (76).Certain agreements, for example, taxholidays, relating to acquisitions and capitalinvestments undertaken by the Company,provide reduced tax rates, fixed amountsof tax as in Kazakhstan (expiring in 2009),or, in some cases exemption from incometax as in Algeria (expiring in 2014).The effects of foreign currency translationof 728 and 521 at December 31, 2008and 2009, respectively, pertain to certainentities with the US dollar as functionalcurrency and the local currency fortax purposes.The tax credits of 95 and 296 in 2008 and2009 respectively are mainly attributableto our operating subsidiaries in Spain.They relate to credits claimed on researchand development, credits on investmentand to tax sparing credits.Other taxes include withholding taxes ondividends, services, royalties and interests.It also includes Secondary Taxation onCompanies (“STC”), which is a tax leviedon dividends declared by South Africancompanies. STC is not included in thecomputation of current or deferredtax as these amounts are calculatedat the statutory company tax rate onundistributed earnings. On declarationof a dividend, the South African OperatingSubsidiary includes the STC tax in itscomputation of the income tax expense.If the South African Operating Subsidiarydistributed all of its undistributed retainedearnings of 2,978 and 2,956 in 2008 and2009, respectively, it would be subject toadditional taxes of 271 and 269, respectively.STC on dividends declared in 2008 and 2009were 31 and 17, respectively.Others of 119 in 2009 mainlyconsists of a tax provision of 40 forthe restructuring of a US subsidiary,tax expense of 51 due to recognitionof a flat tax effect in Mexico and taxexpense of 28 due to prior period taxes.The net deferred tax benefit (expense)recorded directly to equity was (789) and406 as of December 31, 2008 and 2009,respectively. The net current tax benefit(expense) recorded directly to equity was(67) and 18 as of December 31, 2008 and2009, respectively.