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## 5. Income taxes continued 

Income tax benefit (expense) is comprised of the following components: 

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Although Dialog is a UK company, its principal operations are located in Germany. Accordingly, the following information is based on German corporate tax law. 

The tax rate for its German subsidiary is 15%; considering the impact of the solidarity surcharge of 5.5%, the federal corporate tax rate amounts to 15.8%. Combining the federal corporate tax rate with the trade tax rate of 12.6%, the combined statutory tax rate of the German subsidiary is 28.4%. 

