CSL Ltd Annual Report 2019

CSL Limited Annual Report 2019 97 Note 3: Tax 2019 US$m 2018 US$m a. Income tax expense recognised in the statement of comprehensive income Current tax expense Current year 428.5 484.3 Deferred tax expense/(recovery) Origination and reversal of temporary differences 7.2 70.1 Total deferred tax expense/(recovery) 7.2 70.1 Over/(under) provided in prior years (13.3) (2.1) Income tax expense 422.4 552.3 b. Reconciliation between tax expense and pre-tax net profit The reconciliation between tax expense and the product of accounting profit before income tax multiplied by the Group’s applicable income tax rate is as follows: Accounting profit before income tax 2,341.1 2,281.2 Income tax calculated at 30% (2018: 30%) 702.3 684.4 Effects of different rates of tax on overseas income (256.1) (143.3) Research and development incentives (25.5) (12.7) Over/(under) provision in prior year (13.3) (2.1) Other non-deductible expenses 15.0 26.0 Income tax expense 422.4 552.3 c. Income tax recognised directly in equity Deferred tax benefit/(expense) Share-based payments 0.6 (3.2) Income tax benefit/(expense) recognised in equity 0.6 (3.2) d. Deferred tax assets and liabilities Deferred tax asset 378.7 401.3 Deferred tax liability (168.7) (193.7) Net deferred tax asset 210.0 207.6 Deferred tax balances reflect temporary differences attributable to: Amounts recognised in the statement of comprehensive income Inventories 215.6 146.0 Property, plant and equipment (162.6) (120.5) Intangible assets (169.0) (168.0) Trade and other payables 32.7 33.6 Recognised carry forward tax losses a 183.4 178.3 Retirement liabilities, net 50.9 37.7 Receivables and contract assets (54.9) 3.0 Other assets 4.9 6.4 Interest bearing liabilities 13.5 5.6 Other liabilities and provisions 74.2 61.9 Tax bases not in net assets – share-based payments (0.4) 1.8 Total recognised in the statement of comprehensive income 188.3 185.8 Amounts recognised in equity Share-based payments 21.8 21.8 Net deferred tax asset 210.0 207.6 a. Deferred tax assets in respect of carry forward tax losses are principally recorded in CSL entities in Switzerland and the UK (prior year: Switzerland and the UK) and are recognised as it is probable that future taxable profit will be available in those entities to utilise the losses.