Ryanair 2006 Annual Report Download - page 45

Download and view the complete annual report

Please find page 45 of the 2006 Ryanair annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 76

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76

45
ANNUAL REPORT & FINANCIAL STATEMENTS 2006
(Continued)
Notes
4 DEFERRED AND CURRENT TAXATION (Continued)
2006 2005
The components of the tax expense in the income statement were as follows: 000 000
Tax charge for year 1,950 11,967
Release of prior year overprovision (4,673) -
Deferred tax charge relating to origination and reversal of temporary differences 34,899 17,186
32,176 29,153
All of the deferred tax charge above arose from the origination and reversal of timing differences.
The following table reconciles the statutory rate of 2006 2005
Irish corporation tax to the group’s effective current corporation tax rate: % %
Statutory rate of Irish corporation tax 12.5 12.5
Adjustments for earnings taxed at higher rates 1.1 0.9
Adjustments for earnings taxed at lower rates (4.5) (4.2)
Other temporary differences 0.4 0.2
Total effective rate of taxation 9.5 9.4
Deferred tax applicable to items charged or credited directly to equity were as follows: 2006 2005
000 000
Defined benefit pension obligations 334 676
Derivative financial instruments (12,153) -
Total tax charge in equity (11,819) 676
At March 31, 2006 and 2005 the group had unused net operating losses carried forward of 20.3m, and the resultant deferred tax
asset has been netted off against the group’s deferred income tax liability. The company has recognised a deferred tax asset on
these unused operating losses as the directors believe there is sufficient evidence that these losses will be utilised in future
periods. The majority of current and deferred tax recorded in each of fiscal 2006 and 2005 relates to domestic tax charges.
Ryanair.com Limited is engaged in international data processing and reservations services. In these circumstances, Ryanair.com
Limited is entitled to claim effective 10% corporation tax rate on profits derived from qualifying activities in accordance with
Section 448 of the Taxes Consolidation Act, 1997. This legislation provides for the continuation of the 10% effective corporation
tax rate until 2010.
The principal components of deferred tax were: 2006 2005
‘000 ‘000
Arising on capital allowances and other temporary differences 143,033 105,509
Arising on unused net operating losses carried forward (2,537) -
Arising on derivatives (12,153) -
Arising on pensions (1,083) (1,329)
Total 127,260 104,180
At March 31, 2006 and 2005, the group had fully provided for deferred tax liabilities. No deferred tax has been provided on the
unremitted earnings of overseas subsidiaries because there is no intention to remit these to Ireland.