Income tax expense represented the sum of the tax currently payable and deferred tax.
The tax currently payable was based on taxable profit for the year. Taxable profit differed from profit as reported in the statement of comprehensive income because of items of income or expense that were taxable or deductible in other years and items that were never taxable or deductible. The company's liability for current tax was calculated using tax rates that had been enacted or substantively enacted by the end of the reporting period.
Deferred tax was recognised on timing differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities were generally recognised for all taxable timing differences. Deferred tax assets were generally recognised for all deductible temporary differences to the extent that it was probable that taxable profits would be available against which those deductible timing differences can be utilised. The carrying amount of deferred tax assets was reviewed at the end of each reporting period and reduced to the extent that it was no longer probable that sufficient taxable profits would be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities were measured at the tax rates that were expected to apply in the period in which the liability was settled or the asset realised, based on tax rates (and tax laws) that had been enacted or substantively enacted by the end of the reporting period. Deferred tax liabilities were presented within provisions for liabilities and deferred tax assets within debtors. The measurement of deferred tax liabilities and assets reflected the tax consequences that would follow from the manner in which the Company expected, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current or deferred tax for the year was recognised in profit or loss, except when they related to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax was also recognised in other comprehensive income or directly in equity respectively.