Air Canada 2013 Annual Report Download - page 122
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2013 Air Canada Annual Report
122
12. INCOME TAXES
Income Tax Expense
2013 2012
Current income tax recovery in respect of prior years $(8) $ –
Deferred income tax expense – 1
Income tax expense (recovery) $(8) $ 1
The income tax expense (recovery) differs from the amount that would have resulted from applying the statutory income tax
rate to income before income tax expense as follows:
2013 2012
Income (loss) before income taxes $2 $ (135)
Statutory income tax rate based on combined federal and provincial rates 26.57% 26.49%
Income tax expense (recovery) based on statutory tax rates 1 (36)
Effects of:
Non-taxable portion of capital gains (3) (4)
Non-deductible expenses 11 12
Tax rate changes on deferred income taxes (6) (17)
Recognition of previously unrecognized deferred income tax assets (9) –
Unrecognized deferred income tax assets – 39
Adjustment in respect of current income tax of prior years (8) –
Other 6 7
Income tax expense (recovery) $(8) $ 1
The applicable statutory tax rate is 26.57% (2012 – 26.49%). The Corporation’s applicable tax rate is the Canadian combined
rates applicable in the jurisdictions in which the Corporation operates.
The income tax expense relating to components of Other comprehensive income is as follows:
2013 2012
Net gain on remeasurements on employee benefit liabilities $521 $ 213
Recognition of previously unrecognized deferred income tax assets (525) (213)
Tax rate changes on deferred income taxes 4 –
Income tax expense in Other comprehensive income $– $ –
Deferred Income Tax
Certain intangible assets with nominal tax cost and a carrying value of $185 have indefinite lives and accordingly, the
associated deferred income tax liability of $49 (2012 – $49) is not expected to reverse until the assets are disposed of,
become impaired or amortizable. In addition, the Corporation has other deferred income tax liabilities in the amount of $41,
against which a deferred income tax asset of similar amount has been recognized. The recognized net deferred income tax
liability of $49 is included in Other long-term liabilities.