Creative 2010 Annual Report Download - page 36

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36
CREATIVE TECHNOLOGY LTD AND ITS SUBSIDIARIES
8. INCOME TAXES
Group
2010 2009
US$’000 US$’000
Tax credit attributable to loss is made up of:
Current income tax:
- Tax expense for current nancial year 121 879
- Over provision in prior nancial years (240) (1,431)
- Withholding tax 138 212
19 (340)
Deferred income tax:
- Tax (credit) expense for current nancial year (Note 23) (6,300) 553
- (Over) under provision in prior nancial years (Note 23) (8) 52
- Singapore tax concession on oshore interest income remitted (Note 23) (2,000) –
- Eect of change in Singapore tax rate (Note 23) – (780)
(8,308) (175)
(8,289) (515)
The tax credit on loss differs from the amount that would arise using the Singapore standard rate of income tax as explained below:
Group
2010 2009
US$’000 US$’000
Loss before income tax (46,680) (138,391)
Tax calculated at tax rate of 17% (2009: 17%) (7,936) (23,526)
Eects of
- tax exempt loss 1,249 18,640
- income not subject to tax (1,535) (193)
- expenses not deductible for tax purposes 1,159 1,900
- change in Singapore tax rate – (780)
- Singapore tax concession on oshore interest income remitted (2,000) –
- dierent tax rates in other countries 4,442 3,183
- deferred tax assets not recognised 9,596 3,147
- deferred tax assets on pioneer losses previously not recognised (11,800) –
- utilisation of tax losses and other reserves (1,354) (1,719)
- over provision in prior nancial years (248) (1,379)
- withholding tax 138 212
Tax credit (8,289) (515)
The Company was granted a Pioneer Certicate under the International Headquarters Award which expired on 31 March 2010.
Under the Pioneer Certicate, prots arising from qualifying activities were exempted from income tax in Singapore, subject
to certain conditions. Due to the expiration of the Company’s pioneer status where pioneer losses brought forward from the
previous nancial years could be used to offset against certain future tax liabilities, a deferred tax asset of US$11,800,000
was recognised in the nancial year ended 30 June 2010. Additionally, a deferred tax liability of US$2,000,000 was written
back in the nancial year ended 30 June 2010 pertaining to offshore interest income remitted to Singapore which was not
taxable due to a tax concession granted by the Singapore tax authorities. These were offset by an additional provision
of US$5,500,000 for deferred tax liabilities in the nancial year ended 30 June 2010.
notes to tHe fInAncIAl stAteMents
– For the nancial year ended 30 June 2010