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Income Tax Expenses

2021

2020

$’000

$’000

1.3: Income Tax Expense (Competitive Neutrality)

Income tax expense

Profit before Income Tax Expense

14,967

11,050

Less profit of non-contestable activities

(1,209)

(279)

Profit/(loss) before Income Tax Expense relating to contestable activities

13,758

10,771

At the statutory tax rate of 30% (2020: 30%)

4,126

3,231

Less: Tax on R & D Incentive Offset/Prior year adjustment

(53)

-

Add tax effect amounts which are not taxable in calculating taxable income

-

2

Income tax expense reported in the Statement of Comprehensive Income

4,073

3,233

Current income tax:

Current income tax charge

4,438

3,054

Deferred income tax:

Relating to origination and reversal of timing differences

(365)

179

Income tax (benefit)/expense

4,073

3,233

Accounting Policy

Taxation

Except for the competitive neutrality arrangements outlined below, the Mint is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and Goods and Services Tax (GST). Revenues, expenses and assets are recognised net of GST except:

- where the amount of GST incurred is not recoverable from the Australian Taxation Office; and

- for receivables and payables.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included in other receivables or other payables in the Statement of Financial Position.

Cash flows and commitments are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the ATO, are presented as operating cash flows.

Competitive Neutrality

The Mint sells collector coins and minted non-coin products on a for-profit basis and is subject to the Australian Government's Competitive Neutrality Policy. The Mint is required to make Australian Income Tax and ACT Payroll Tax Equivalent payments to the Government, in addition to payments for FBT and GST. Notional interest calculation for purposes of competitive neutrality is based on the current 10-year market bond rate.

The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on the company tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements and to unused tax losses.

Accounting Judgements and Estimates

Recovery of deferred tax assets

Deferred tax assets are recognised for deductible temporary differences only if the Mint considers it is probable that future taxable amounts will be available to utilise those temporary differences and unused tax losses.

Deferred tax calculations for the income year ended 30 June 2021

Opening balance

Recognised in profit or loss

Recognised directly in equity

Closing balance

$’000

$’000

$’000

$’000

Deferred tax (liabilities)/assets in relation to:

Leasehold Improvements

(41)

-

-

(41)

Plant and equipment at cost

1

-

-

1

Plant and equipment - revaluation

(363)

-

-

(363)

R&D capitalised

(133)

-

-

(133)

Other payables

115

26

-

141

Employee provisions - Current

1,185

(22)

-

1,163

Employee provisions - Non Current

272

15

-

287

Make-good provision

14

2

-

16

Tax liabilities (payroll tax liability)

294

(1)

-

293

Lease liabilities - right-of-use assets - current

(224)

345

-

121

1,120

365

-

1,485

Deferred tax calculations for the income year ended 30 June 2020

Opening balance

Recognised in profit or loss

Recognised directly in equity

Closing balance

$’000

$’000

$’000

$’000

Deferred tax (liabilities)/assets in relation to:

Receivables

72

(72)

-

-

Leasehold improvements - revaluation

(41)

-

-

(41)

Plant and equipment at cost

1

-

-

1

Plant and equipment - revaluation

(363)

-

-

(363)

R&D capitalised

(133)

-

-

(133)

Other payables

28

87

-

115

Employee provisions - Current

1,181

4

-

1,185

Employee provisions - Non Current

257

16

-

273

Make-good provision

11

2

-

13

Tax liabilities (payroll tax liability)

286

8

-

294

Lease liabilities - right-of-use assets - current

-

(224)

-

(224)

1,299

(179)

-

1,120