XXXV. Income tax

The balance of €68,204k (€103,569k in 2007) includes €50,858k in current taxes (€106,481k the previous year) and €3,882k in net deferred tax liabilities (net deferred tax assets of €17,487k in 2007). Regional tax on productive activities (IRAP), which is charged on Italian operations and whose basis is essentially EBIT plus personnel expense, came to €13,464k (€14,822k in 2007).

In 2008 the Group's theoretical tax rate, excluding IRAP, was approximately 30%. The substantial decrease with respect to the previous year's 35% stems from nominal rate reductions in various countries (including Italy, from 33% to 27.5%) and from the higher proportion of income earned in countries where tax rates are lower than average.

Below is a reconciliation between the tax charge recognised in the consolidated financial statements and the theoretical tax charge.

The latter was determined by applying the theoretical tax rate to the gross income earned in each jurisdiction, including additional taxes on future profit distributions by subsidiaries.

XXXV. Income tax