Page 93 - Suncorp_Review

Suncorp Group Limited Annual Report 2010/11 91

11. Income tax

11.1 Income tax expense

CONSOLIDATED

2011 2010 $m $m

Proft before tax 702 1,118 Income tax using the domestic corporation tax rate of 30% (2010: 30%) 211 335 Increase in income tax expense due to:

Non-deductible expenses 15 15 Imputation gross-up on dividends received 11 12 Statutory funds 10 (1) Income tax offsets and credits (37) (39) Amortisation of acquisition intangible assets 7 7 Other 7 13 224 342 Under (Over) provision in prior years 21 (13) Income tax expense on proft before tax 245 329 Income tax expense recognised in proft consists of: Current tax expense

Current year 337 239 Adjustments for prior years (25) (6) 312 233 Deferred tax expense

Origination and reversal of temporary differences (67) 96 Total income tax expense 245 329

Income tax of Life companies

Australia

Income tax expense includes an expense of $73 million (2010: $83 million) attributable to the Life companies’ statutory funds.

For Australia, the income tax expense is partly determined on a product basis and partly determined on a proft basis. The income tax expense has been determined after aggregating various classes of business, each with different tax rates. The statutory rates of taxation applicable to the taxable income of signifcant classes of business are as follows:

APPLICABLE TAX RATE

2011 2010 % %

Class of business

Complying superannuation business 1 15 15 Ordinary class of business 30 30 Shareholder funds 30 30

Note

1 Includes Virtual Pooled Superannuation Trust (VPST).

New Zealand

In New Zealand, a corporate tax rate of 30% (2010: 30%) applies for all classes of business.

The Government in New Zealand has announced a reduction in the company tax rate from 30% to 28% for income years after 1 October 2010. For the Suncorp Group’s New Zealand companies the effective date will be 1 July 2011. Deferred tax assets and liabilities for the current and comparative year have been adjusted accordingly on an estimated realisation basis, resulting in a deferred tax expense of $1 million.