Income tax expense
In 2007 and 2006, pre-tax income was SEK 21,259 million and SEK 4,127 million, respectively. Income tax expense was distributed as follows.
January-December
SEK in millions

20072006
Tax expenses brought to income



Current taxes

2,5372,232
Deferred taxes

-1,279-1,333
Total tax expenses brought to income

1,258899
Tax expense recognized directly in shareholders' equity



Deferred taxes

145
Total tax expense recognized directly in shareholders' equity

145
Adjustments for current tax expense attributable to prior years amounted to SEK -2 million in 2007 and SEK -1 million in 2006.
The difference between the nominal Swedish income tax rate and the effective tax rate comprises the following components.
January-December
Percent

20072006
Swedish income tax rate

28.028.0
Adjustment of current taxes for prior periods

0.00.0
Non-deductible expenses

0.40.7
Tax-exempt income

-22.5-6.9
Effective tax rate as per the income statement

5.921.8
Tax recognized directly in shareholders' equity

0.10.1
Effective tax rate

6.021.9
Tax-exempt income primarily refers to dividends from subsidiaries and associated companies. No accumulated non-expiring tax loss carry-forwards exist for the years 2007 and 2006.
Income tax assets and liabilities
Deferred tax assets and liabilities changed as follows.
December 31,
SEK in millions

20072006
Deferred tax assets



Carrying value, opening balance

307335
Income statement period change

-58-23
Recognized in shareholders' equity

-14-5
Carrying value, closing balance

235307
Deferred tax liabilities



Carrying value, opening balance

1,3372,693
Income statement period change

-1,337-1,356
Carrying value, closing balance

-1,337
Temporary differences in deferred tax assets and liabilities were as follows.
December 31,
SEK in millions

20072006
Deferred tax assets



Delayed expenses for provisions and other long-term liabilities

235307
Total deferred tax assets

235307
Deferred tax liabilities



Accelerated depreciation, non-current assets

-1,337
Total deferred tax liabilities

-1,337
Net deferred tax assets (+)/ liabilities (-)

235-1,030
The parent company's unrecognized deferred tax liability in untaxed reserves amounted to SEK 5,617 million in 2007 and SEK 4,893 million in 2006.
Untaxed reserves, appropriations and Group contributions
Untaxed reserves in the balance sheet were distributed as follows.
December 31,
SEK in millions

20072006
Profit equalization reserve

7,2814,259
Accumulated excess amortization and depreciation

12,78013,217
Total

20,06117,476
Excess amortization and depreciation changed as follows.
December 31, 2007December 31, 2006
SEK in millionsIntangible assetsPlant and machineryIntangible assetsPlant and machinery
Opening balance13413,0832512,214
Provisions--109869
Reversals-26-411--
Closing balance10812,67213413,083
Appropriations brought to income were as follows.
January-December
SEK in millions

20072006
Profit equalization reserve

-3,022-2,526
Accumulated excess amortization and depreciation

437-978
Net effect on income

-2,585-3,504
Under certain conditions, it is possible to transfer profits through group contributions between Swedish companies in a group. Group contributions provided are normally a deductible expense for the contributor and taxable income for the recipient. Group contributions were as follows.
January-December
SEK in millions

20072006
Pre-tax Group contributions net received (Note 8)

2,9911,107