9. TAXES

INCOME TAXES

Earnings before income taxes and minority interest was attributable to the following geographic regions:

Germany

264

192

International

977

857

Total

1,241

1,049

Income tax expenses (benefits) for 2007 and 2006 consisted of the following:

in million €	Germany	International	2007 Total	Germany	International	2006 Total

Current taxes	112	324	436	119	218	337
Deferred taxes	6	6	12	-26	103	77
Income taxes	118	330	448	93	321	414

In 2007 and 2006, Fresenius SE was subject to German federal corporation income tax at a base rate of 25% plus a solidarity surcharge of 5.5% on federal corporation taxes payable.

The German Business Tax Reform Act (Unternehmensteuerreformgesetz 2008) was enacted in the third quarter of 2007 resulting in a reduction of the corporate income tax rate from 25% to 15% for German companies. This reduction together with technical changes to trade tax rules will reduce Fresenius Group’s German entities’ combined corporate income tax rate effective as of January 1, 2008. Deferred tax assets and liabilities for German entities which will be realized in 2008 and beyond were revalued to reflect the new enacted tax rate. The revaluation of deferred tax assets and liabilities resulted in deferred tax expenses of € 5 million which have been included in operations for the year 2007.

A reconciliation between the expected and actual income tax expense is shown on the following page. The expected corporate income tax expense is computed by applying the German corporation tax rate (including the solidarity surcharge) and the effective trade tax rate on income before income taxes and minority interest. The respective combined tax rates were 38.05% for the fiscal year 2007 and 37.36% for the fiscal year 2006.

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