33 Income taxes

Income taxes (€593 million) break down as follows:

Income taxes of €593 million were €313 million lower than in the previous year, mainly due to the one-off adjustment made in 2011, relating to deferred tax at 31 December 2010 (€188 million) due to application of additional IRES (Robin Hood Tax) for natural gas transportation and distribution.

The impact of taxes on pre-tax profit for the period is 43.2% (53.4% in 2011) in view of the theoretical tax rate of 34.7% (33.0% in 2011), which is obtained by applying the statutory tax rate of 27.5% (IRES) to pre-tax profit and 3.9% (IRAP) to the net value of production.

The analysis of the difference between the theoretical and actual tax rates is as follows:

Permanent differences and other factors include:

• increase: (i) 0.7 percentage points (€10 million) in the different rates of regional production tax (IRAP); and (ii) 0.5 percentage points (€7 million) for the 5% tax on dividends received.
• decrease: (i) for 1.1 percentage points (€15 million), the effect of valuing equity interests using the shareholders’ equity criterion; and (ii) for 1.7 percentage points (€23 million), deduction of 10% of IRAP for IRES purposes (deduction for the current year and for reimbursement request for previous years).

The decrease in the effective rate for 2012 (43.2%) compared with 2011 (53.4%) is mainly due to the higher tax expenses registered in 2011 arising from the one-off tax adjustment of deferred taxes at 31 December 2010.

The breakdown of deferred and prepaid taxes based on the nature of the most significant temporary differences is provided in Note 25 “Deferred tax liabilities”.