Income tax expense

I’m looking at the following income statement and see that EBT is negative for 2008 and 2007: Given that, why then is income tax expense greater than 0? Why do you have to pay taxes when you didn’t make any money?

I havent looked at what you provided, but is the EBT based on book income or taxable income? Also, in a lot of countries you would have other taxes than just income based (for example, in Mexico the IETU).

go to page 72 of the 10-k here, they walk you from the calculated 35% benefit down to whats in the I/S: basically took valuation allowances against their deferred tax assets - these made the provision and effective tax rate go wonky