Note 3: Tax continued Current taxes Current tax assets and liabilities are the amounts expected to be recovered from (or paid to) tax authorities, under the tax rates and laws in each jurisdiction. These include any rates or laws that are enacted or substantively enacted as at the balance sheet date. Deferred taxes Deferred tax liabilities are recognised for taxable temporary differences. Deferred tax assets are recognised for deductible temporary differences and carried forward unused tax losses, only if it is probable that taxable profit will be available to utilise them. The carrying amount of deferred tax assets is reviewed at the reporting date. If it is no longer probable that taxable profit will be available to utilise them, they are reduced accordingly. As at 30 June 2024, $278m in deferred tax assets have not been recognised with respect to tax losses with expiry dates not yet lapsed. Deferred tax is measured using tax rates and laws that are enacted at the reporting date and are expected to apply when the related deferred tax asset is realised or when the deferred tax liability is settled. The Group continues to apply the mandatory temporary exemption regarding the recognition of deferred tax assets and liabilities related to Pillar Two and Domestic Minimum Tax incomes taxes in accordance with AASB 2023-2 Amendments to Australian Accounting Standards International Tax Reform – Pillar Two Model Rules. Deferred tax assets and liabilities are offset only if a legally enforceable right exists to set-off current tax assets against current tax liabilities and if they relate to the same taxable entity or group and the same taxation authority. Income taxes attributable to amounts recognised in OCI or directly in equity are also recognised in OCI or in equity, and not in the consolidated income statement. CSL Limited and its 100% owned Australian subsidiaries have formed a tax consolidated group effective from 1 July 2003. International Tax Reform – Pillar Two Model Rules The Organisation for Economic Co-Operation and Development (OECD) published the Pillar Two Model Rules in December 2021, which are designed to ensure large multinational enterprises pay a minimum level of tax on the income arising in each of the jurisdictions where they operate by ensuring that each country has a tax rate of at least 15%. A number of countries in which the Group operates has implemented or announced the proposed implementation of Pillar Two rules, including the Australian Government which released draft Pillar Two legislation on 21 March 2024. The Pillar Two legislation will apply to the Group from 1 July 2024. As a result, there is no tax impact for the year ended 30 June 2024. Work has commenced to evaluate the potential future impact of the Pillar Two legislation on the Group. Based on this analysis as at the reporting date, and having regard to available historical and reasonably estimable data, Pillar Two is not anticipated to have a material impact on the current tax expense of the Group from 1 July 2024. Key Judgements and Estimates The risk of uncertain tax positions, and recognition and recoverability of deferred tax assets, are regularly assessed. To do this requires judgements about the application of income tax legislation in jurisdictions in which the Group operates and the future operating performance of entities with carry forward losses. This includes matters such as the availability and timing of tax deductions and the application of the arm’s length principle to related party transactions, that are subject to risk and uncertainty. Changes in circumstances may alter expectations and affect the carrying amount of deferred tax assets and liabilities. Any resulting adjustment to the carrying value of deferred taxes will be recorded as a credit or charge to the statement of comprehensive income. 118 Notes to the Financial Statements Limited Annual Report 2023/24
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