Singapore Airlines 2007 Annual Report Download - page 100

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NOTES TO THE FINANCIAL STATEMENTS
31 March 2007
Singapore Airlines 98 Annual Report 2006-07
10 Taxation (in $ million)
The Group
2006-07 2005-06
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Current taxation
Provision for the year 185.6 183.7
(Over)/Under provision in respect of prior years (42.1) 78.7
Share of joint venture companies’ taxation 4.9 (0.8)
Share of associated companies’ taxation (7.1) 62.3
Reversal of tax contingency provision no longer required – 4.0
––––––––––––––––––––––––––––––––––––
141.3 327.9
––––––––––––––––––––––––––––––––––––
Deferred taxation
Movement in temporary differences 164.8 132.0
Under/(Over) provision in respect of prior years 22.8 (107.3)
––––––––––––––––––––––––––––––––––––
187.6 24.7
––––––––––––––––––––––––––––––––––––
328.9 352.6
Adjustment for reduction in Singapore statutory tax rate (246.7) –
––––––––––––––––––––––––––––––––––––
82.2 352.6
––––––––––––––––––––––––––––––––––––
On 15 February 2007, the Government announced a 2% points reduction in statutory tax rate from Year of Assessment
2008. The fi nancial effect of the reduction in tax rate was refl ected in the current fi nancial year. The aggregate
adjustment of the prior year’s deferred tax liabilities was $246.7 million for the Group.
The Group has tax losses of approximately $26.9 million (2006: $14.7 million) that are available for offset against future
taxable profi ts of the companies in which no deferred tax assets are recognised due to uncertainty of its recoverability.
The use of the tax losses is subject to the agreement of the tax authorities and compliance with certain provisions of the
tax legislation of the respective countries in which the companies operate.
A reconciliation between taxation expense and the product of accounting profi t multiplied by the applicable tax rate for
the years ended 31 March is as follows:
The Group
2006-07 2005-06
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Profi t before taxation 2,284.6 1,662.1
––––––––––––––––––––––––––––––––––––
Taxation at statutory tax rate of 18.0% (2005-06: 20.0%) 411.2 332.4
Adjustments
Income not subject to tax (114.7) (44.4)
Expenses not deductible for tax purposes 57.4 69.4
Higher effective tax rates of other countries 15.4 26.3
Overprovision in respect of prior years, net (19.3) (28.6)
Effect of change in statutory tax rate (246.7) –
Income under an incentive scheme (1.9) (3.7)
Reversal of tax contingency provision no longer required – 4.0
Others (19.2) (2.8)
––––––––––––––––––––––––––––––––––––
Taxation 82.2 352.6
––––––––––––––––––––––––––––––––––––