NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2022 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2022 30 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 2022 2021 2022 2021 $’000 $’000 $’000 $’000 Deferred tax assets 12 47,468 69,302 – – Deferred tax liabilities (350,253) (196,068) (19,384) (18,565) (302,785) (126,766) (19,384) (18,565) 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 2022 2021 $’000 $’000 Deductible temporary differences 380,994 623,811 Tax losses 600,782 745,296 981,776 1,369,107 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 2022 2021 $’000 $’000 Expiry dates – Within 1 to 5 years 204,971 249,484 – After 5 years 11,119 6,089 216,090 255,573 At 31 December 2022, a deferred tax liability of $40,608,000 (2021: $28,651,000) in respect of temporary differences of $424,928,000 (2021: $439,757,000) 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 2022, the Group has not recognised deferred tax liabilities of $18,298,000 (2021: $32,670,000) relating to temporary differences on the initial recognition of assets and liabilities of the subsidiaries acquired. 30 DEFERRED TAX LIABILITIES (CONT’D) At 1 January 2022 Recognised in profit or loss (note 34) Recognised in the statement of comprehensive income (note 34) Disposal of subsidiaries (note 40) Reclassifications Translation differences on consolidation At 31 December 2022 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Group Deferred tax liabilities Property, plant and equipment 164,998 2,549 – (7,479) (418) (28,171) 131,479 Investment properties 61,957 (2,085) – (326) (3,156) (2,954) 53,436 Development properties 16,851 (2,667) – – (396) (2,128) 11,660 Employee benefits 1,151 (2,087) 1,258 1,297 323 330 2,272 Unremitted earnings 68,379 164,980 – 2,641 (2,641) (82) 233,277 Others 9,236 4,350 – 2,172 5,685 (3,930) 17,513 322,572 165,040 1,258 (1,695) (603) (36,935) 449,637 Deferred tax assets Tax losses (175,562) 43,041 – 8,487 603 4,264 (119,167) Trade and other payables (20,244) (7,550) – – – 109 (27,685) (195,806) 35,491 – 8,487 603 4,373 (146,852) Total 126,766 200,531 1,258 6,792 – (32,562) 302,785 At 1 January 2021 Recognised in profit or loss At 31 December 2021 Recognised in profit or loss At 31 December 2022 $’000 $’000 $’000 $’000 $’000 Company Deferred tax liabilities Investment properties 11,648 (470) 11,178 (699) 10,479 Unremitted earnings 14,077 (5) 14,072 (5) 14,067 Others (291) 171 (120) 207 87 25,434 (304) 25,130 (497) 24,633 Deferred tax assets Property, plant and equipment (4,819) 1,204 (3,615) 1,206 (2,409) Tax losses (1,115) 1,115 – – – Development properties (2,862) – (2,862) 53 (2,809) Trade and other payables (994) 906 (88) 57 (31) (9,790) 3,225 (6,565) 1,316 (5,249) Total 15,644 2,921 18,565 819 19,384 CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2022 FINANCIALS 194 195
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