15 |
Taxation |
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|
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|
|
| |
SA rand |
|
|
US dollar |
| |
2010 |
2011 |
|
Figures in million |
2011 |
2010 |
| |
|
|
|
Taxation by region |
|
|
| |
|
|
|
SA taxation |
|
|
| |
43 |
(23) |
|
Mining tax (a) |
(4) |
6 |
 |
|
|
|
|
|
|
| |
44 |
9 |
|
Current year |
1 |
6 |
| |
(1) |
(32) |
|
Prior year overprovision |
(5) |
– |
|
|
|
|
|
|
|
| |
41 |
28 |
|
Non-mining tax (b) |
4 |
5 |
|
|
|
|
|
|
|
| |
40 |
28 |
|
Current year |
4 |
5 |
| |
1 |
– |
|
Prior year underprovision |
– |
– |
|
|
|
|
|
|
|
| |
364 |
(282) |
|
Deferred tax (c) |
(40) |
48 |
|
|
|
|
|
|
|
| |
– |
85 |
|
– Current year |
12 |
– |
| |
– |
(367) |
|
– Previously unrecognised temporary differences |
(52) |
– |
|
|
|
|
|
|
|
| |
– |
7 |
|
Secondary Tax on Companies (STC) |
1 |
– |
| |
448 |
(270) |
|
|
(39) |
59 |
| |
|
|
|
Foreign taxation |
|
|
| |
(113) |
(210) |
|
Deferred tax (d) |
(30) |
(15) |
| |
335 |
(480) |
|
Total taxation |
(69) |
44 |
| |
|
|
|
Taxation by type |
|
|
| |
43 |
(23) |
|
Mining tax |
(4) |
6 |
| |
41 |
28 |
|
Non-mining tax |
4 |
5 |
| |
251 |
(492) |
|
Deferred tax |
(70) |
33 |
| |
– |
7 |
|
STC |
1 |
– |
| |
335 |
(480) |
|
|
(69) |
44 |
| |
(a) |
Mining tax on gold mining income in South Africa is determined according to a formula, based on the taxable income, net of any qualifying capital expenditure from mining operations. 5% of total mining revenue is exempt from taxation while the remainder is taxable at a higher rate than non-mining income as a result of applying the gold mine formula. All qualifying mining capital expenditure is deducted from taxable mining income to the extent that it does not result in an assessed loss. Accounting depreciation is eliminated when calculating the South African mining tax income. Excess capital expenditure is carried forward as unredeemed capital to be claimed from future mining taxable income. The group has several tax paying entities in South Africa. In terms of the mining ringfencing application, each ringfenced mine is treated separately and deductions can normally only be utilised against mining income generated from the relevant ringfenced mine. |
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|
Gold mining companies within the group that have elected to be exempt from Secondary Tax on Companies (STC) are taxed at higher rates than those that have not made the election. |
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(b) |
Non-mining income is taxed at 35% (exempt from STC) and 28% (no election made). Non-mining companies are taxed at the statutory corporate rate of 28%. |
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(c) |
The deferred tax rate used to calculate deferred tax is based on the current estimate of future profitability when temporary differences will reverse, based on tax rates and tax laws that have been enacted at balance sheet date. Depending on the profitability of the operations, the deferred tax rate can consequently be significantly different from year to year. The only significant movement in the deferred tax rate was at Evander Gold Mines Limited, where the tax rate changed from 22.9% to 11.5%. This was due to the annual review of the life-of-mine of the operation. |
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(d) |
Mining and non-mining income of Australian and PNG operations are taxed at a standard tax rate of 30%. |
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Income and mining tax rates |
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The tax rates remained unchanged for the 2011 and 2010 financial years. |
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Major items causing the group’s income tax provision to differ from the maximum mining statutory tax rate of 43% (2010: 43%) were: |
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SA rand |
|
|
US dollar |
| |
2010 |
2011 |
|
Figures in million |
2011 |
2010 |
| |
(75) |
(50) |
|
Tax on net profit from continuing operations at the maximum mining statutory tax rate |
(6) |
(10) |
| |
(144) |
(42) |
|
Non-allowable deductions |
(6) |
(19) |
| |
24 |
(22) |
|
(Loss)/profit from associates |
(3) |
3 |
| |
16 |
20 |
|
Difference between effective mining tax rate and statutory mining rate on mining income |
3 |
2 |
| |
22 |
15 |
|
Difference between non-mining tax rate and statutory mining rate on non-mining income |
2 |
3 |
| |
(726) |
(249) |
|
Effect on temporary differences due to changes in effective tax rates |
(36) |
(95) |
| |
– |
367 |
|
Previously unrecognised temporary differences1 |
52 |
– |
| |
– |
32 |
|
Prior year overprovision – mining and non-mining tax |
5 |
– |
| |
548 |
416 |
|
Capital allowance, sale of business and other rate differences |
59 |
72 |
| |
– |
(7) |
|
STC |
(1) |
– |
| |
(335) |
480 |
|
Income and mining taxation |
69 |
(44) |
| |
191% |
(410%) |
|
Effective income and mining tax rate |
(493%) |
183% |
| |
| 1 |
The credit in 2011 of R367 million (US$53 million) is for the Freegold unredeemed capital allowance. The South African Revenue Service (SARS) previously disallowed Freegold’s “post 1973 gold mine” additional capital allowance claim, and also disallowed Freegold’s application of mining ringfencing. SARS withdrew the additional capital allowance claim on 10 March 2011, conceding that the Freegold operations are entitled to claim this capital allowance. The inclusion of the capital allowance caused an increase in the deferred tax asset on the balance sheet and the resulting credit in the income statement. Refer to note 38(b) for developments on the ringfencing application dispute. |
|
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Deferred tax |
| |
The analysis of deferred tax assets and liabilities is as follows: |
| |
SA rand |
|
|
US dollar |
| |
2010 |
2011 |
|
Figures in million |
2011 |
2010 |
| |
(1 875) |
(1 149) |
|
Deferred tax assets |
(170) |
(246) |
|
|
|
|
|
|
|
| |
(1 688) |
(1 003) |
|
Deferred tax asset to be recovered after more than 12 months |
(148) |
(221) |
| |
(187) |
(146) |
|
Deferred tax asset to be recovered within 12 months |
(22) |
(25) |
|
|
|
|
|
|
|
| |
5 409 |
4 216 |
|
Deferred tax liabilities |
623 |
709 |
|
|
|
|
|
|
|
| |
5 125 |
3 916 |
|
Deferred tax liability to be recovered after more than 12 months |
578 |
672 |
| |
284 |
300 |
|
Deferred tax liability to be recovered within 12 months |
45 |
37 |
|
|
|
|
|
|
|
| |
3 534 |
3 067 |
|
Net deferred tax liabilities |
453 |
463 |
| |
Deferred tax liabilities and assets on the balance sheets as at 30 June 2011 and 30 June 2010 relate to the following: |
| |
SA rand |
|
|
US dollar |
| |
2010 |
2011 |
|
Figures in million |
2011 |
2010 |
| |
5 422 |
5 589 |
|
Gross deferred tax liability |
825 |
711 |
|
|
|
|
|
|
|
| |
5 406 |
5 576 |
|
Amortisation and depreciation |
823 |
709 |
| |
– |
(1) |
|
Product inventory not taxed |
– |
– |
| |
16 |
14 |
|
Other |
2 |
2 |
|
|
|
|
|
|
|
| |
(1 887) |
(2 522) |
|
Gross deferred tax asset |
(372) |
(248) |
|
|
|
|
|
|
|
| |
(1 506) |
(2 175) |
|
Unredeemed capital expenditure |
(321) |
(198) |
| |
(269) |
(268) |
|
Provisions, including non-current provisions |
(39) |
(35) |
| |
(112) |
(79) |
|
Tax losses |
(12) |
(15) |
|
|
|
|
|
|
|
| |
(1) |
– |
|
Disposal groups classified as held-for-sale |
– |
– |
| |
3 534 |
3 067 |
|
Net deferred tax liability |
453 |
463 |
| |
Movement in the net deferred tax liability recognised in the balance sheet is as follows: |
| |
SA rand |
|
|
US dollar |
| |
2010 |
2011 |
|
Figures in million |
2011 |
2010 |
| |
3 251 |
3 534 |
|
Balance at beginning of year |
463 |
421 |
| |
251 |
(492) |
|
(Credit)/charge per income statement – continuing operations |
(70) |
33 |
| |
– |
34 |
|
Charge per income statement – discontinued operations |
5 |
– |
| |
32 |
(9) |
|
Foreign currency translation |
55 |
9 |
| |
3 534 |
3 067 |
|
Balance at end of year |
453 |
463 |
| |
As at 30 June, certain subsidiaries in the group had the following tax credits: |
| |
SA rand |
|
|
US dollar |
| |
2010 |
2011 |
|
Figures in million |
2011 |
2010 |
| |
13 604 |
16 812 |
|
Unredeemed capital expenditure available for utilisation against future mining taxable income1 |
2 481 |
1 783 |
| |
394 |
409 |
|
Tax losses carried forward utilisable against taxable income |
60 |
52 |
| |
469 |
470 |
|
Capital gains tax (CGT) losses available to be utilised against future CGT gains. |
69 |
61 |
| |
2 947 |
3 225 |
|
As at 30 June, the group has not recognised the following deferred tax asset amounts |
476 |
386 |
| |
|
|
|
The unrecognised temporary differences are: |
|
|
| |
8 165 |
8 977 |
|
Unredeemed capital expenditure2 |
1 325 |
1 070 |
| |
114 |
113 |
|
Tax losses |
17 |
15 |
| |
469 |
469 |
|
CGT losses |
69 |
61 |
| |
1 190 |
1 190 |
|
Temporary differences relating to investments in associates |
176 |
156 |
| |
1 |
The three highest contributors were Avgold R8 977 million (US$1 325 million), Australia R4 684 million (US$691 million), Randfontein R1 531 million (US$226 million). |
| |
2 |
Relates to Avgold. |
| |
Secondary Tax on Companies (STC) |
| |
STC is a tax levied on South African companies at a rate of 10% with effect from 1 October 2007 on dividends distributed. |
| |
Current and deferred tax are measured at the tax rate applicable to undistributed income and therefore only take STC into account to the extent that dividends have been received or paid. |
| |
On declaration of a dividend, the company includes the STC on this dividend in its computation of the income tax expense in the period of such declaration. |
| |
SA rand |
|
|
US dollar |
| |
2010 |
2011 |
|
Figures in million |
2011 |
2010 |
| |
141 |
– |
|
Available STC credits at end of year |
– |
18 |
| |
On 12 August 2011, the board of directors approved a final dividend for the 2011 financial year of 60 (2010: 50) SA cents per share (8.3 (2010: 6.8) US cents). The total dividend amounts to R258 million (US$35.9 million at date of declaration) (2010: R214 million) (US$29.3 million) based on issued shares at 30 June 2011. As the dividends declared exceed the STC credits available, STC on the amount of R258 million (US$35.9 million) (2010: R73 million (US$9.6 million)) is payable at a rate of 10%. |
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