Corporate Report for the year ended 30 June 2022
Introduction and overview
Business performance
Governance and risk
Directors’ report
Remuneration report
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Section B: Notes to the Group financial statements for the year ended 30 June 2022
Section B: Notes to the Group financial statements for the year ended 30 June 2022
B7 Income tax (continued) Transurban (USA) Holdings tax consolidated group
Transurban (USA) Holdings Inc (TUSAH) is the head company of the TUSAH tax consolidated group. The TUSAH tax consolidated group contains the entities that are responsible for employment and providing services to the Group’s North America operations. The TUSAH tax consolidated group owns membership interests in TC and AM Partners partnerships and includes its share of the TC and AMP partnerships’ profits or losses in its US tax return. Concession A25 LP Concession A25 LP (A25 LP) is treated as a partnership for tax purposes and is the main operating entity of the A25 Group. The partners of A25 LP include their share of A25 LP’s profits or losses in their individual Canadian tax returns. All entities within the Canadian operations are standalone entities for tax purposes. Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included within other receivables or other payables in the balance sheet. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows. KEY ESTIMATE AND JUDGEMENT The Group is subject to income taxes in Australia, the United States and Canada. Significant judgement is required in determining the provision for income taxes. There are various transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group recognises liabilities for tax audit issues based on whether it is anticipated that additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred tax assets and liabilities in the period in which such determination is made. The Group has recognised deferred tax assets relating to carried forward tax losses to the extent there are sufficient taxable temporary differences relating to the same taxation authority against which the unused tax losses can be utilised. The utilisation of tax losses also depends on the ability of the Group to satisfy certain tests at the time the losses are recouped, including: • In the United States, all tax losses relate to periods post 30 June 2018, and are generally carried forward indefinitely, subject to an 80 per cent utilisation limit on taxable income in any given year; and • In Canada tax losses generally expire after a 20 year period. During the year ended 30 June 2022, management have reviewed forecast taxable profits for the TIL Australia tax consolidated group and have recognised deferred tax assets in relation to previously unbooked tax losses. The change in the TIL Australia tax loss utilisation profile has arisen due to new cross-staple interest bearing loans established as a result of the Group equity issuance completed in October 2021. Management have reviewed forecast taxable profits including the potential impact of reductions in traffic due to COVID-19, near-term interest rates and inflation and have recognised deferred tax assets in relation to tax losses.
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