Explanation

The key insight comes from analyzing the "Effect of tax rates in foreign jurisdictions" line:

• Year T-2: 2%
• Year T-1: 4%

This component represents the impact of operating in foreign jurisdictions with tax rates different from the domestic statutory rate. A positive effect means the company is operating in countries with higher tax rates than the domestic rate.

Analysis:

• In Year T-1, the foreign jurisdiction effect increased from 2% to 4%
• This indicates the company generated a larger proportion of its profits in countries with higher tax rates
• The effective tax rate remained at 30% despite the domestic statutory rate decreasing from 30% to 28% because the increased foreign tax burden offset the domestic rate reduction

Conclusion: The company most likely generated a higher share of its profit in countries with higher marginal tax rates in Year T-1 compared to Year T-2.