| 2008 | 2009 | Figures in million | 2009 | 2008 | ||
|---|---|---|---|---|---|---|
| SA Rands | US Dollars | |||||
| South African taxation | ||||||
| – | 153 | Mining tax (1) | 19 | – | ||
| 85 | 89 | Non-mining tax (2) | 10 | 12 | ||
| 42 | 33 | Under provision prior year | 4 | 6 | ||
| Deferred taxation: | ||||||
| (161) | 535 | Temporary differences (3) | 61 | (30) | ||
| Unrealised non-hedge derivatives and other | ||||||
| 841 | (1,451) | commodity contracts | (181) | 89 | ||
| 62 | (156) | Change in estimated deferred tax rate (4) | (21) | 6 | ||
| (70) | – | Change in statutory tax rate | – | (9) | ||
| 799 | (797) | (108) | 74 | |||
| Foreign taxation | ||||||
| 651 | 1,113 | Normal taxation (1) | 138 | 79 | ||
| (41) | (50) | Over provision prior year | (7) | (5) | ||
| Deferred taxation: | ||||||
| (3,747) | 1,220 | Temporary differences (3) | 164 | (372) | ||
| 259 | (314) | Unrealised non-hedge derivatives and other commodity contracts | (40) | 27 | ||
| (2,878) | 1,969 | 255 | (271) | |||
| (2,079) | 1,172 | 147 | (197) | |||
| Tax reconciliation | ||||||
| % | % | A reconciliation of the effective tax rate charged in the income statement to the prevailing estimated corporate tax rate is set out in the following table: | % | % | ||
| 12 | (100) | Effective tax rate | (121) | 14 | ||
| Disallowable items: | ||||||
| 8 | 204 | Derivative losses | 236 | 12 | ||
| 2 | (23) | Share of equity accounted investments’ profit (loss) | (27) | 4 | ||
| (2) | (3) | Other | (3) | (2) | ||
| 8 | 5 | Foreign income tax allowances and rate differentials | 31 | 8 | ||
| – | (39) | Exchange variation and translation adjustments | (68) | – | ||
| (1) | – | Current tax assets previously unrecognised | – | (1) | ||
| 1 | 10 | Current unrecognised tax assets | 12 | 1 | ||
| – | (13) | Change in estimated deferred tax rate (4) | (17) | (1) | ||
| – | (1) | Prior year under provision | (3) | – | ||
| 7 | (5) | Other | (5) | – | ||
| 35 | 35 | Estimated corporate tax rate (5) | 35 | 35 | ||
(1) There was no mining tax charge in 2008 as the mining income was primarily offset by the non-mining losses from the accelerated non-hedge derivative buy-backs. Included in normal foreign taxation is tax on the disposal of tangible assets of $18m, R145m (2008: $1m, R10m) (note 14).
(2) In South Africa, non-mining income is taxed at the higher non-mining tax rate of 35% (2008: 35%) as the company has elected to be exempt from STC. Companies who elected to be subject to STC are taxed at the lower company tax rate of 28% (2008: 28%) for non-mining taxation purposes.
(3) Included in temporary differences in South African taxation is a tax credit on the impairment and disposal of tangible assets of $8m, R61m (2008: tax credit $8m, R75m). Included in temporary differences of foreign taxation is a tax charge on the impairment reversals and disposal of tangible assets of $190m, R1,421m (2008: tax credit of $387m, R3,840m) (note 14).
(4) In South Africa the mining operations are taxed on a variable rate that increases as profitability increases. The tax rate used to calculate deferred tax is based on the group’s current estimate of future profitability when temporary differences will reverse. Depending on the profitability of the operations, the tax rate can consequently be significantly different from year to year. The change in the estimated deferred tax rate at which the temporary differences will reverse amounts to a credit of $21m, R156m (2008: tax charge of $6m, R62m).
(5) Mining tax on mining income in South Africa is determined according to a formula based on profit and revenue from mining operations. The company has elected to be exempt from STC and is taxed at a higher rate of company tax for mining and non-mining income tax purposes.
| 2008 | 2009 | Figures in million | 2009 | 2008 |
|---|---|---|---|---|
| SA Rands | US Dollars | |||
| All mining capital expenditure is deducted to the extent that it does not result in an assessed loss and depreciation is ignored when calculating the South African mining income. Capital expenditure not deducted from mining income is carried forward as unredeemed capital to be deducted from future mining income. South Africa operates under two tax paying operations, Vaal River Operation and West Wits Operation. Under ring-fencing legislation, each operation is treated separately and deductions can only be utilised against income generated by the relevant tax operation. | ||||
| The formula for determining the South African mining tax rate is: | ||||
| Y = 43 – 215/X (2008: Y = 43 – 215/X) where Y is the percentage rate of tax payable and X is the ratio of mining profit net of any redeemable capital expenditure to mining revenue expressed as a percentage. | ||||
| Unrecognised tax losses | ||||
| 3,204 | 2,964 | Unrecognised tax losses of the US operations which are available for offset against future profits earned in the USA | 399 | 339 |
| 1,741 | – | Unrecognised tax losses of the Australian operations which are available for offset against future capital gains in Australia | – | 184 |
| 4,945 | 2,964 | 399 | 523 | |
| Analysis of tax losses | ||||
| Tax losses available to be used against future profits | ||||
| – | 943 | – utilisation required within one year | 127 | – |
| 1,240 | 36 | – utilisation required between two and five years | 5 | 131 |
| 3,705 | 1,985 | – utilisation in excess of five years | 267 | 392 |
| 4,945 | 2,964 | 399 | 523 | |
| Unrecognised tax losses utilised | ||||
| – | 1,741 | Assessed losses utilised during the year | 184 | – |