Each country has its own tax regimes with varying nominal rates, deductions and tax attributes.

The Company conducts operations through its various subsidiaries in a number of countries throughout the world. It is possible that the ultimate resolution of the tax exposures could result in tax charges that are materially higher or lower than the amount provided. This amount is in relation of uncertain tax position concerning various taxes other than corporate income tax. In common with other international groups, the difference in alignment between the Company’s global operating model and the jurisdictional approach of tax authorities often leads to uncertainty on tax positions.Īs a result of the above, in the period, the Company recorded a net tax increase of US$ 5.7 million in respect of ongoing tax audits and in respect of the Company’s review of its uncertain tax positions. The principal risks that arise for the Company are in respect of permanent establishment, transfer pricing and other similar international tax issues.

While the Company cannot predict or provide assurance as to the final outcome of these proceedings, the Company does not expect the ultimate liability to have a material effect on its consolidated statement of financial position or results of operations, although it could have a material adverse effect on its consolidated cash flows.Įach year management completes a detailed review of uncertain tax positions across the Company and makes provisions based on the probability of the liability arising. The Company provides for taxes that it considers probable of being payable as a result of these audits and for which a reasonable estimate may be made. The Company believes there is a sound basis for its tax positions in those jurisdictions. Tax authorities in certain jurisdictions are examining tax returns and in some cases have issued assessments. Tax returns in the major jurisdictions in which the Company operates are generally subject to examination for periods ranging from three to six years. The Company files federal and local tax returns in several jurisdictions throughout the world. The components of the Company’s income taxes were as follows: Income tax recognized in the consolidated Income Statement Additionally, where a deferred tax asset is not recognized on a loss carry forward, the effective tax rate is impacted by the unrecognized tax loss. Significant decreases in profit before income tax typically lead to a higher effective tax rate, while significant increases in profit before income taxes can lead to a lower effective tax rate, subject to the other factors impacting income tax expense noted above. Consequently, income tax expense does not change proportionally with profit before income taxes. The relationship between the Company’s income tax expense and profit before income tax (referred to as ’effective tax rate’) can vary significantly from period to period considering, among other factors, (a) changes in the blend of income that is taxed based on revenues versus profit before taxes, (b) the different statutory tax rates in the location of the Company’s operations and (c) the possibility to recognize deferred tax assets on tax losses to the extent that suitable future taxable profits will be available. 4.5 Notes to the Company Financial Statements.4.3.35 Events After End of Reporting Period.4.3.34 Independent Auditor’s Fees and Services.4.3.32 Information on Non-controlling Interests.4.3.31 Interest in Joint Ventures and Associates.4.3.29 Financial Instruments − Fair Values and Risk Management.4.3.24 Borrowings and Lease Liabilities.4.3.23 Equity Attributable to Shareholders.4.3.21 Derivative Financial Instruments.4.3.17 Deferred Tax Assets and Liabilities.4.3.8 Net Impairment Gains/(Losses) on Financial and Contract Assets.

4.3.7 Research and Development Expenses.4.3.4 Other Operating Income and Expense.4.3.2 Operating Segments and Directional Reporting.4.3 Notes to the Consolidated Financial Statements.

Income tax expense