65 ―
14. Income tax expense/ (benefit)
2020 $M
2019 $M
Reconciliation of income tax expense/(benefit)
NOTE
152.5
Prof it/(loss) before income tax Tax at current rate of 28% Current tax adjustments: Non–deductible expenses
136.5
42.7
38.2
1.9 9.3 9.0
3.3
Adjustment relating to sale of Kapuni gas interest
–
Impairment
13.0
(1.6) (1.2)
(Over)/under provisions in prior periods
0.4
Other permanent difference
(0.9)
Deferred tax adjustments: Impact from tax legislation amendment (Over)/under provisions in prior periods
(3.5) (1.4)
15
–
(1.5)
Income tax expense/(benefit)
55.2
52.5
Comprising: Current tax Deferred tax
27.8 27.4
40.8 11.7
Policies
Income tax expense/(benef it) comprises current and deferred tax and is calculated using rates enacted or substantively enacted at balance date. Current and deferred tax is recognised in prof it or loss unless the tax relates to items in other comprehensive income, in which case the tax is recognised as an adjustment in other comprehensive income against the item to which it relates. During the year ended 30 June 2020, Vector introduced a new dividend and imputation policy and moved away from its previous approach of fully imputing dividend payments to shareholders. The previous imputation policy has driven the recognition of a current income tax asset at 30 June 2020 of $33.7 million (2019: $52.4 million) and a non-current income tax asset of $110.0 million (2019: $52.3 million).
Income tax asset
Imputation credits
There are no imputation credits available for use as at 30 June 2020 (2019: nil), as the imputation account has a debit balance as of that date.
15. Deferred tax Deferred tax liability/ (asset)
PROVISIONS AND ACCRUALS $M
HEDGE RESERVES $M
PPE AND INTANGIBLES $M
OTHER $M
TOTAL $M
NOTE
Balance at 30 June 2018 Recognised in prof it or loss
514.8
(19.6)
(15.5)
6.9
486.6
20.5
(5.9)
–
(2.9)
11.7
Recognised in other comprehensive income Recognised from adoption of NZ IFRS 15 Recognised from adoption of NZ IFRS 16
– – –
– – –
(8.2)
–
(8.2) (2.3) (0.2)
– –
(2.3) (0.2)
Balance at 30 June 2019 Recognised in prof it or loss
535.3
(25.5)
(23.7)
1.5
487.6
23.1
7.9
–
(0.1)
30.9
–
–
(8.0)
–
(8.0)
Recognised in other comprehensive income Deferred tax associated with sale of Kapuni gas interests Impact from tax legislation amendment
1.0
6.0
– –
– –
7.0
5
(3.5)
–
(3.5)
Balance at 30 June 2020
555.9
(11.6)
(31.7)
1.4
514.0
Notes to the Financial Statements
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