Cathay Pacific 2008 Annual Report Download - page 62

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Notes to the Accounts STATEMENT OF COMPREHENSIVE INCOME
6. Taxation
2008
HK$M
2007
HK$M
Current tax expenses
– Hong Kong profits tax 41 61
– Overseas tax 330 502
– (Over)/under provisions for prior years (234) 37
Deferred tax
– Origination and reversal of temporary differences (1,398) 199
– Decrease in tax rate (76) –
(1,337) 799
Hong Kong profits tax is calculated at 16.5% (2007: 17.5%) on the estimated assessable profits for the year.
Overseas tax is calculated at rates of tax applicable in countries in which the Group is assessable for tax. Tax
provisions are reviewed regularly to take into account changes in legislation, practice and status of negotiations
(see note 30(d) to the accounts).
A reconciliation between tax credit/(charge) and accounting (loss)/profit at applicable tax rates is as follows:
2008
HK$M
2007
HK$M
Consolidated (loss)/profit before tax (9,671) 8,009
Notional tax calculated at Hong Kong profits tax rate of 16.5% (2007: 17.5%) 1,595 (1,402)
Expenses not deductible for tax purposes (184) (57)
Tax provisions over/(under) provided in prior years 234 (37)
Effect of different tax rates in overseas jurisdictions (796) 449
Tax losses recognised 341 59
Income not subject to tax 71 189
Effect on opening deferred tax balances resulting from a change in tax rate 76 –
Tax credit/(charge) 1,337 (799)
Further information on deferred tax is shown in note 18 to the accounts.
60 Cathay Pacific Airways Limited Annual Report 2008