Income tax
| |
2012 |
2011 |
| Current income tax charge |
110.8 |
121.8 |
| Deferred income tax expense/(benefit) |
80.6 |
(27.8) |
| |
191.4 |
94.0 |
Income before taxation for financial reporting purposes is reconciled to taxation as follows:
| |
2012 |
2011 |
| Profit before income tax |
357.7 |
585.3 |
| Tax rate |
20% |
20% |
| Theoretical tax at rate applicable for each jurisdiction |
(71.5) |
(117.1) |
| Tax effect of items which are not deductible or assessable for taxation purposes: |
|
|
| Non-taxable income |
8.6 |
95.2 |
| Non-deductible expenses |
(50.8) |
(74.2) |
| Unrecognised current year tax losses |
(4.9) |
(2.3) |
| Recognition of previously unrecognised tax losses
|
3.8 |
— |
| Write off of temporary differences |
(65.0) |
— |
| Over/(under) provided in prior years |
(11.6) |
4.4 |
| |
(191.4) |
(94.0) |
The Group did not recognise deferred tax assets of USD 4.9 million related to OJSC AK Russia’s tax losses as the subsidiary is not expected to earn sufficient taxable profits in the foreseeable future against which the unused tax losses can be utilised by the Group.
During the year the Group revised its estimates related to the deductibility of tax losses of OJSC AK Russia and JSC Vladivostok Air and wrote off deferred tax assets in amount of USD 65.0 million.
During the 2011 year the Group recognized non-taxable income related to the exchange of OJSC Terminal shares on non-controlling shares in OJSC MASH and disposal of the subsidiary CJSC Nordavia.
| |
2012 |
Movement for year |
2011 |
Movement for year |
2010 |
| Tax effects of temporary differences: |
|
|
|
|
|
| Tax loss carry-forwards |
46.2 |
(33.8) |
80.0 |
20.4 |
59.6 |
| Long-term investments |
1.1 |
1.8 |
(0.7) |
(0.7) |
— |
| Accounts receivable |
3.2 |
(10.5) |
13.7 |
12.4 |
1.3 |
| Property, plant and equipment |
45.4 |
3.0 |
42.4 |
40.6 |
1.8 |
| Accounts payable |
18.7 |
0.6 |
18.1 |
(6.9) |
25.0 |
| Financial instrument |
10.6 |
4.7 |
5.9 |
3.5 |
2.4 |
| |
|
|
|
|
|
| Deferred tax assets before tax set off
|
125.2 |
(34.2) |
159.4 |
69.3 |
90.1 |
| Tax set off |
(29.5) |
(10.2) |
(19.3) |
38.5 |
(57.8) |
| Deferred tax assets after tax set off
|
95.7 |
(44.4) |
140.1 |
107.8 |
32.3 |
| |
|
|
|
|
|
| Property, plant and equipment |
(69.3) |
(36.9) |
(32.4) |
40.0 |
(72.4) |
| Customs duties related to aircraft operation leases |
(25.2) |
3.6 |
(28.8) |
0.2 |
(29.0) |
| Long-term investments |
(5.7) |
(4.7) |
(1.0) |
4.2 |
(5.2) |
| Accounts receivable |
(3.5) |
(1.4) |
(2.1) |
2.7 |
(4.8) |
| Accounts payable |
0.5 |
(2.7) |
3.2 |
3.6 |
(0.4) |
| Tax loss carry-forwards |
— |
(0.6) |
0.6 |
0.6 |
— |
| |
|
|
|
|
|
| Deferred tax liabilities before tax set off
|
(103.2) |
(42.7) |
(60.5) |
51.3 |
(111.8) |
| Tax set off |
29.5 |
10.2 |
19.3 |
(38.5) |
57.8 |
| Deferred tax liabilities after tax set off
|
(73.7) |
(32.5) |
(41.2) |
12.8 |
(54.0) |
| Movement for the year, net |
|
(76.9) |
|
120.6 |
|
| Less: Deferred tax recognised directly in equity |
|
2.3 |
|
(3.8) |
|
| Disposed subsidiaries |
|
(2.2) |
|
30.6 |
|
| Acquisition of subsidiaries |
|
— |
|
(118.2) |
|
| Effect of translation to presentation currency |
|
(3.8) |
|
(1.4) |
|
| Deferred tax benefit/(expense) for the year
|
|
(80.6) |
|
27.8 |
|
A deferred tax liability in relation to temporary differences of USD 6.3 million (31 December 2011: deferred tax assets of USD 12.1 million) relating to investments in subsidiaries has not been recognised in the consolidated financial statements as the Group is able to control the timing of reversal of the difference, and reversal is not expected in the foreseeable future.
