NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2025 29 DEFERRED TAX LIABILITIES (CONT’D) Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same taxation authority. The amounts, determined after appropriate offsetting, are as follows: Group Company Note 2025 2024 2025 2024 $’000 $’000 $’000 $’000 Deferred tax assets 12 29,967 35,414 – – Deferred tax liabilities (392,518) (415,039) (5,100) (7,631) (362,551) (379,625) (5,100) (7,631) Deferred tax assets have not been recognised in respect of the following items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits therefrom: Group 2025 2024 $’000 $’000 Deductible temporary differences 380,225 373,759 Tax losses 785,775 768,875 1,166,000 1,142,634 The deductible temporary differences do not expire under current tax legislation. The tax losses are subject to agreement by the tax authorities and compliance with tax regulations in the respective countries in which certain subsidiaries operate. The tax losses with expiry dates are as follows: Group 2025 2024 $’000 $’000 Expiry dates – Within 1 to 5 years 168,029 179,142 – After 5 years 171 1,216 168,200 180,358 At 31 December 2025, a deferred tax liability of $62,398,000 (2024: $64,271,000) in respect of temporary differences of $669,584,000 (2024: $627,924,000) related to the withholding tax on the distributable profits of the Group’s subsidiaries was not recognised because the Group controls whether the liability will be incurred and it is satisfied that it will not be incurred in the foreseeable future. Under SFRS(I) 1-12 Income Taxes, deferred tax is not recognised for temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting or taxable profit or loss. As at 31 December 2025, the Group has not recognised deferred tax liabilities of $123,304,000 (2024: $33,370,000) relating to temporary differences on the initial recognition of assets and liabilities of the subsidiaries acquired. Global minimum top-up tax The Group is subject to the global minimum top-up tax under Pillar Two tax legislation. The Group recognised a current tax expense of $297,000 (2024: $749,000) related to top-up tax which is triggered by the Group’s subsidiaries. The Group has applied a temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax and accounts for it as a current tax when it is incurred. 178 | CITY DEVELOPMENTS LIMITED
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