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7. Finance costsINA GroupINA d.d.2007 2006 2007 2006Foreign exchange losses 180 217 88 151Interest payable on long-term loans 152 87 145 75Other interest payable 231 167 235 174Loss on embedded derivatives 5 - 5 -Other financial expenses 65 18 48 10633 489 521 4108. TaxationINA GroupINA d.d.2007 2006 2007 2006Current tax expense 211 274 159 225Deferred tax charge/(benefit) relating to originationand reversal of temporary differences51 (53) 51 (51)Income tax expense for the year 262 221 210 174Domestic income tax rate is calculated at 20 per cent in2007 (2006: 20 per cent) of the income before taxes forthe year.Income taxes are recorded on the basis of estimatedtaxable income in accordance with the fiscal lawsprevailing in the country in which they originate. TheCompany is subject to corporate income tax on its taxableprofits in Croatia.The total charge for the year can be reconciled to the accounting profits as follow:INA GroupINA d.d.2007 2006 2007 2006Profit before tax 1,133 1,105 1,200 844Income tax expense calculated at 20% 227 221 240 169Tax effect of permanent differences 35 2 25 5Reversal of unrecognised deferred tax assets - (2) (55) -Current and deferred tax expense 262 221 210 174Annual report 2007109