KPMG Talkbook template - Tax Executives Institute, Inc.

SEC Comments on Income Taxes• We also note that your response indicates the reason for the higher effective rate in 2010 isdue to a higher proportion of income being derived from your businesses in Latin America,the United Kingdom, and the U.S., which have higher tax rates than Spain. However, theeffect of different tax rates disclosed in Note 27 is a net decrease from the statutory tax rateof 30 percent, which seems to indicate you are deriving income from foreign jurisdictionswith lower tax rates than Spain. Please reconcile this apparent inconsistency.• Expand your disclosure to separately disclose the effect of the income tax rates of foreignjurisdictions so that a reader may understand the significant factors that affect your incometax expense. Clearly disclose the basis of these adjustments (i.e., whether they are thestatutory tax rates or the effective tax rates) in each of the countries for which you incur amaterial amount of tax expense.• We note …that income before income taxes pertaining to Ireland was significant to totalincome (loss) before income taxes for all periods presented. Please consider disclosing ingreater detail the impact on your effective income tax rates and obligations of havingproportionately higher earnings in countries with statutory income tax rates lower than theU.S. A separate discussion of foreign effective income tax rates may be necessary tounderstand your results of operations...© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independentmember firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.NDPPS 1056655