Corporate Report for the year ended 30 June 2022
Introduction and overview
Business performance
Governance and risk
Directors’ report
Remuneration report
Financial statements
Sustainability supplement
Security holder information
Income taxes
THT Income taxes – not applicable
TIL – Note D5 Income tax benefit: $49m Current tax assets: $10m Current tax liabilities: $1m Deferred tax assets: $33m Deferred tax liabilities: $1,099m
Group – Note B7 Income tax benefit: $276m Current tax assets: $10m Current tax liabilities: $6m Deferred tax assets: $915m Deferred tax liabilities: $1,832m
Key audit matter
How our audit addressed the key audit matter Our procedures included, amongst others:
The Transurban Group is subject to income taxes in Australia and North America. Judgement is required in determining the provision for income taxes, specifically those industry specific tax rules and provisions which require significant judgement and detailed understanding of the legislation and relevant case law. Some of the tax provisions are subject to interpretation and therefore for some transactions the ultimate tax determination is uncertain. Deferred tax assets relating to carried forward tax losses are recognised to the extent there are sufficient taxable profits relating to the same taxation authority against which the unused tax losses can be utilised. The assumptions supporting this position are dependent on future cash flows generated from the toll roads operating in each tax group. Future taxable profits will need to be generated in order to support the recognition of the deferred tax assets. Due to the stapled structure of the Group, tax calculations are complex and require the Group to make judgements and assumptions. Furthermore, as described in Note B7, the Transurban Group consists of six different tax consolidated groups with their own Tax Sharing and Tax Funding agreements, each of which creates additional complexities in the calculations. We considered this to be a key audit matter for the Group and TIL due to the accounting complexity of the calculations, judgmental nature and expertise required to estimate the tax positions recorded.
Using Australian and US tax experts to gain an understanding of the current status of tax assessments and investigations and assessing the impact of selected new tax laws and guidance on the tax balances recognised. Reading recent rulings and selected correspondence with local tax authorities, as well as external advice provided to the Group and TIL where relevant, to assess the associated tax provisions. Testing a sample of deferred and income tax calculations for each tax group. Assessing the key assumptions used to support the recognition of tax losses and their future utilisation in light of COVID-19 impacts, specifically forecast taxable profits. The key assumptions included judgements over forecast traffic performance including the impacts of COVID-19.
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