Page 96 - Forterra

94 FORTERRA
ANNUAL REPORT 2012
NOTES TO THE
FINANCIAL STATEMENTS
24 INCOME TAX EXPENSE
2012 2011
$’000 $’000
Current tax expense
PRC income tax 715 561
Deferred tax expense
Origination and reversal of temporary differences 27,611 86,911
Withholding income tax 1,395 1,505
29,721 88,977
Reconciliation of effective tax rate
Profit before taxation 76,388 298,333
Income tax using the PRC tax rate of 25% 19,097 74,583
Effect of different tax rates in foreign jurisdictions 5,774 9,056
Non-deductible expenses 7,203 1,576
Tax exempt income (376) (1,075)
Effect of foreign exchange differences transferred to equity * (6,737) 2,481
Utilisation of tax losses not recognised in previous years (150) (699)
Deferred tax assets not recognised 2,294 –
Withholding tax 1,395 1,505
Others 1,221 1,550
29,721 88,977
* relates to foreign exchange differences arising from inter-company loans which, in substance, form part
of a subsidiary’s net investment in foreign operations. Such foreign exchange differences are transferred
to the foreign currency translation reserve in the consolidated financial statements of the Group.