2007 Financial statements

Note 8 - Tax on profit

	Note	2007 US$m	2006 US$m
UK taxation
Corporation tax at 30%
- Current		98	86
- Deduct: relief for overseas taxes		(98)	(72)
- Deferred		(150)	27
		(150)	41
Australian taxation
Corporation tax at 30%
- Current		1,396	1,517
- Deferred		(18)	(97)
		1,378	1,420
Other countries taxation
- Current		897	896
- Deferred		(35)	16
		862	912
Total taxation charge
- Current		2,293	2,427
- Deferred	18	(203)	(54)
		2,090	2,373

Prima facie tax reconciliation
Profit before taxation		9,836	10,240
Deduct: share of profit after tax of equity accounted units		(1,584)	(1,378)
Parent companies' and subsidiaries' profit before tax		8,252	8,862
Prima facie tax payable at UK and Australian rate of 30%		2,476	2,659
Impact of items excluded in arriving at underlying earnings (c)		(28)	201

Other permanent differences
Additional recognition of deferred tax assets (a)		-	(335)
Utilisation of previously unrecognised deferred tax assets		-	(140)
Adjustments to deferred tax liabilities following changes in tax rates (b)		(392)	(46)
Other tax rates applicable outside the UK and Australia		271	242
Resource depletion and other depreciation allowances		(173)	(187)
Research, development and other investment allowances		(81)	(21)
Other		17	-
Total taxation charge		2,090	2,373

The 'Additional recognition of deferred tax assets' of US$335 million in 2006 reflected improved prospects for future earnings from the Group's US operations.
The 'Adjustments to deferred tax liabilities following changes in tax rates', totalling US$392 million (2006: US$46 million), result largely from a reduction in Canadian tax rates.

An analysis of the impact on the tax reconciliation of items excluded in arriving at Underlying earnings is given below:

	2007 US$m	2006 US$m
Impairment (charges)/reversals	(1)	157
Exchange gains/losses on US dollar net debt, intragroup balances and derivatives not designated as hedges	(19)	55
Other exclusions	(8)	(11)
	(28)	(201)

This tax reconciliation relates to the parent companies, subsidiaries and proportionally consolidated units. The Group's share of profit of equity accounted units is net of tax charges of US$917 million (2006: US$770 million).