14. Taxes on income

(amounts in millions of €, unless otherwise indicated)

	2008		2007
Current tax expense	82.2		136.8
Deferred tax (income)/expense	-203.2		17.8
(Income)/expense	-121.0		154.6

Effects of the impairment of goodwill (€ 555.8 million) as well as effects from changes in deferred taxes (in total € 226.1 million) impact the average effective tax rate significantly. For comparative reasons the table below presents the percentages without these effects, using an income before taxes of € 453.2 million and a tax charge of € 105.1 million.

In 2008, the average effective tax rate on income before taxes is 23.2% (2007: 28.7%). The reconciliation between the income tax rate of the company’s country of domicile and the weighted average applicable tax rate (weighted average of the statutory applicable tax rates on the income before taxes of the companies in the Group), and the average effective tax rate, respectively, is as follows:

	2008		2007
Income tax rate of the company’s country of domicile	25.5%		25.5%
Effect of income tax rates in other (non-domestic) jurisdictions	3.5%		4.9%
Weighted average applicable tax rate	29.0%		30.4%
Tax-exempt income	-6.1%		-1.9%
Changes in statutory applicable tax rates and effects prior years	0.0%		2.5%
Change in provisions on deferred tax assets and other	0.3%		-2.3%
Average effective tax rate	23.2%		28.7%

The change in the weighted average applicable tax rate in 2008 compared to 2007 is caused by a changed mix of results of subsidiaries in countries with different tax rates and is also influenced by the decrease in the statutory tax rate in Germany.

The item tax-exempt income reflects the increased tax efficiencies within the Group in 2008 in comparison to 2007.

In 2007 the item ‘changes in statutory applicable tax rates and effects prior years’ included the effects on the valuation of deferred taxes due to the change in the statutory applicable tax rates, mainly in Germany.

In the year 2008 the deferred tax liabilities with respect to the recapture obligation ensuing from incorporation in the Netherlands of tax losses incurred in the United States has been released for the amount of € 186.1 million, since it is considered not likely that the liability will be settled in the foreseeable future after restructurings in the Group. Together with the recognition of € 40 million in respect of deferred tax assets in relation to tax losses carry-forward in the United States, after merging the operations of Randstad and Vedior in the United States, this resulted in a tax income of € 226.1 million.