Note 4: 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 to the extent that it is probable that taxable profit will be available to utilise them. The recognition of tax losses primarily relates to deferred tax assets recognised by CSL Behring AG following the reduction in the Swiss tax carrying value of its investment in subsidiaries (related to CSL Vifor), reflecting the impairment outcomes identified during the year ended 30 June 2026 (refer to Note 3). While the resulting impairment is eliminated on consolidation and does not impact the Group's consolidated carrying value of the investment, it gives rise to tax losses for Swiss tax purposes. The deferred tax asset has been recognised based on management's assessment that sufficient future taxable profits will be available to utilise the resulting tax losses. A portion of the resulting Swiss tax losses remains unrecognised and may be recognised in future periods should forecasts of future taxable profits support recoverability. The carrying amount of deferred tax assets is reviewed at each reporting date. If it is no longer probable that sufficient taxable profit will be available to utilise them, the carrying amount is reduced accordingly. As at 30 June 2026, $402m (2025: $84m) of deferred tax assets have not been recognised in respect of tax losses for which expiry dates have not yet lapsed. Of the unrecognised deferred tax assets, approximately $298m relates to the Swiss tax losses arising from the reduction in the Swiss statutory carrying value of CSL Behring AG's investment in CSL Vifor discussed above. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted at the reporting date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. The Group continues to apply the mandatory temporary exemption from recognising deferred tax assets and liabilities arising from Pillar Two income taxes, including domestic minimum top-up 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 where a legally enforceable right exists to set off current tax assets against current tax liabilities and where the deferred tax assets and liabilities 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 equity, respectively, and not in the consolidated income statement. CSL Limited and its wholly 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) Pillar Two Rules apply to the Group. Accordingly, the consolidated financial statements for the year ended 30 June 2026 have been prepared taking into account the requirements of the Pillar Two legislation. Based on the assessment performed at the reporting date, Pillar Two did not have a material impact on the Group’s current tax expense for the year ended 30 June 2026. 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. During year ended 30 June 2026, CSL Behring AG recognised deferred tax assets arising from tax losses generated following the reduction in the Swiss tax carrying value of its investment in CSL Vifor. Recognition of these deferred tax assets required significant judgement regarding the availability and timing of future taxable profits to utilise the losses. Management expects these tax losses to be utilised within the applicable jurisdictional timeframes. 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 profit or loss in future periods. 105 Notes to the Financial Statements 105 CSL Limited Annual Report 2025/26
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