HSBC 2003 Annual Report Download - page 259

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8 Tax on profit on ordinary activities
The charge for taxation comprises:
2003 2002 2001
US$m US$m US$m
Current taxation
United Kingdom corporation tax charge – current year ............................. 1,819 1,09611,217
United Kingdom corporation tax charge – adjustment in respect of
prior years ............................................................................................. (149) (68) (261)
Relief for overseas taxation ....................................................................... (1,123) (344)1(540)
547 684 416
Overseas taxation – current year ................................................................ 2,646 1,246 1,638
Overseas taxation – adjustment in respect of prior years ........................... (56) (29) (68)
Joint ventures ............................................................................................ 1(6) (13)
Associates .................................................................................................. 19 17 26
3,157 1,912 1,999
Deferred taxation
Origination and reversal of timing differences .......................................... (5) 615 (176)
Effect of change in tax rate on opening asset ............................................. (7) –3
Adjustment in respect of previous periods ................................................. (25) 7162
(37) 622 (11)
Total charge for taxation ........................................................................... 3,120 2,534 1,988
HSBC Holdings and subsidiaries tax charge ............................................. 3,100 2,523 1,975
Joint ventures tax charge ........................................................................... 1(6) (13)
Associates tax charge ................................................................................ 19 17 26
3,120 2,534 1,988
1Figures for 2002 have been restated to reflect in greater detail the effect of underlying taxes attributable to overseas group dividends
receivable in the UK. This has no impact on the total tax charge.
HSBC Holdings and its subsidiary undertakings in the United Kingdom provide for UK corporation tax at 30 per
cent (2002 and 2001: 30 per cent). Overseas tax includes Hong Kong profits tax of US$483 million (2002: US$408
million; 2001: US$450 million). Subsidiary undertakings in Hong Kong provide for Hong Kong profits tax at the
rate of 17.5 per cent (2002 and 2001: 16 per cent) on the profits for the year assessable in Hong Kong. Other
overseas subsidiary undertakings and overseas branches provide for taxation at the appropriate rates in the countries
in which they operate.
2003 2002 2001
US$m US$m US$m
Analysis of overall tax charge
Taxation at UK corporate tax rate of 30% (2002 and 2001: 30%) .............. 3,845 2,895 2,400
Impact of differently taxed overseas profits in principal locations .............. (366) (472) (616)
Tax free gains ............................................................................................. (17) (19) (102)
Argentine losses ......................................................................................... (25) 87 336
Goodwill amortisation ................................................................................ 476 261 263
Amortisation of acquisition accounting adjustments ................................... (331) ––
Prior period adjustments ............................................................................. (230) (90) (167)
Other items .................................................................................................. (232) (128) (126)
Overall tax credit charge ............................................................................. 3,120 2,534 1,988
Timing differences subject to deferred tax
Accelerated capital allowances ................................................................... (1) 23 (84)
Timing differences on lease income ............................................................ (187) (90) (97)
Provision for bad and doubtful debts .......................................................... 356 (29) 46
Relief for losses brought forward ................................................................ 52 (125) 85
Provision for Princeton Note settlement ..................................................... –(221) 221
Other short-term timing differences ............................................................ (183) (180) (160)
Deferred tax credit/(charge) ........................................................................ 37 (622) 11
Current tax charge ....................................................................................... 3,157 1,912 1,999