Sun Life 2012 Annual Report Download - page 153

22.B Income Tax Expense
22.B.i. In our Consolidated Statements of Operations, income tax expense (benefit) for the years ended December 31 has the
following components:
2012 2011
Current income tax expense (benefit):
Current year $ 226 $ 287
Adjustments in respect of prior years, including resolution of tax disputes (44) (69)
Total current income tax expense (benefit) $ 182 $ 218
2012 2011
Deferred income tax expense (benefit):
Origination and reversal of temporary differences(1) $14 $ (329)
Tax expense (benefit) arising from unrecognized tax losses (8) (64)
Adjustments in respect of prior years, including resolution of tax disputes 22 24
Total deferred income tax expense (benefit) $28 $ (369)
Total income tax expense (benefit) $ 210 $ (151)
(1) 2011 balances have been restated. Refer to Note 2.
22.B.ii Income tax benefit (expense) recognized directly in equity for the years ended December 31:
2012 2011
Recognized in other comprehensive income:
Current income tax benefit (expense) $ (4) $ (5)
Deferred income tax benefit (expense) (65) 39
Total recognized in other comprehensive income $ (69) $34
Recognized in equity, other than other comprehensive income:
Current income tax benefit (expense) 29 –
Deferred income tax benefit (expense) (28) (3)
Total income tax benefit (expense) recorded in equity, including tax benefit (expense) recorded in other
comprehensive income $ (68) $31
22.B.iii Our effective income tax rate differs from the combined Canadian federal and provincial statutory income tax rate as
follows:
For the years ended December 31, 2012 2011
%%
Total net income (loss) $ 1,501 $ 341
Add: Income tax expense (benefit)(1) 210 (151)
Total net income (loss) before income taxes $ 1,711 $ 190
Taxes at the combined Canadian federal and provincial statutory income tax rate(1) $ 453 26.5 $ 53 28.0
Increase (decrease) in rate resulting from:
Higher (lower) effective rates on income subject to taxation in foreign
jurisdictions(1) (9) (0.5) 56 29.5
Tax (benefit) cost of unrecognized tax losses (8) (0.5) (64) (33.7)
Tax exempt investment income (200) (11.7) (201) (105.8)
Tax rate and other legislative changes 3 0.2 ––
Adjustments in respect of prior years, including resolution of tax disputes (22) (1.3) (45) (23.7)
Other (7) (0.4) 50 26.2
Total tax expense (benefit) and effective income tax rate $ 210 12.3 $ (151) (79.5)
(1) 2011 balances have been restated. Refer to Note 2.
In 2006 and later years the Canadian federal government and certain provinces enacted legislation reducing corporate income tax
rates. As a result of these enactments, our statutory income tax rate declined from 28% in 2011 to 26.5% in 2012.
In 2012, the U.K. government enacted legislation reducing the statutory corporate income tax rate to 24% effective April 1, 2012 and
23% effective April 1, 2013. In addition, a new tax regime for life companies, effective January 1, 2013, has been enacted in the U.K.
The net impact of these enactments is reflected in line Tax rate and other legislative changes in the table above.
Notes to Consolidated Financial Statements Sun Life Financial Inc. Annual Report 2012 151