24. Taxes on Income Current income taxes Germany 33.7 26.7 Other countries 78.7 59.1 112.4 85.8 Deferred taxes -0.7 -1.6 111.7 84.2 2004 2003 € million € million Earnings before income taxes 370.7 264.1 Theoretical tax expense  Tax rate of the AG = 36.91% (previous year: 36.85%) 136.8 97.3 Difference from tax rates in other countries  -34.1 -20.2 Other tax effects: Intra-group entries 6.5 1.2 Goodwill amortisation 0.2 1.5 Release of value adjustment on deferred taxes -0.3 -4.6 Tax provisions 1.5 5.4 Other non-deductible expenses and income  and consolidation and other effects 1.1 3.7 Effective tax expense 111.7 84.2 Effective tax rate 30.1% 31.9% 2004 2003 € million € million Net earnings € million 257.3 179.3 Average number of shares in circulation in shares of stock 16,025,243 15,931,607 Diluted number of shares in shares of stock 16,352,761 16,448,893 Earnings per share € 16.06 11.26 Earnings per share, diluted € 15.74 10.90 2004 2003 25. Earnings per Share Current income taxes in Germany relate to corporation tax,  solidarity surcharge and trade tax.  In general, PUMA AG and its German subsidiary are subject  to corporation tax plus solidarity surcharge and trade tax which  is deductible upon determination of the income subject to  corporation tax. This resulted in a mixed tax rate of 36.91% in the financial year Reconciliation from the theoretical tax expense to effective tax expense:  Earnings per share are determined in accordance with IAS 33 by dividing group earnings by the average number of outstanding shares. A dilution of this indicator results from potential shares from the Management Incentive Program. The share option  program has a diluting effect on profits in the financial year. The calculations are presented below: 85 Foreword | Mission | Management Report | Share | Marketing |  Consolidated Financial Statements - IFRS - | Report of Supervisory Board | Board of Management