9. Income tax expense/ (benefit)
2019 $M
2018 $M
Reconciliation of income tax expense/(benefit)
136.5
Profit/(loss) before income tax Tax at current rate of 28% Current tax adjustments: Non-deductible expenses Relating to prior periods – others
186.6
38.2
52.2
3.3 0.1
3.3 1.9
–
Relating to MEL Network Limited removal
(16.7)
13.0
Impairment
–
(0.3)
Other
(1.3)
Deferred tax adjustments: Relating to prior periods – others Income tax expense/(benefit)
(1.8)
(2.6)
52.5
36.8
Comprising: Current tax Deferred tax
40.8 11.7
28.1
8.7
MEL Network Limited removal MEL Network Limited (MEL), a wholly owned subsidiary of Vector, was removed from the Companies Office register on 27 March 2018. Following the removal, the related party advance between MEL and Vector Limited was written off, resulting in an income tax benefit of $16.7 million to the group in the year ended 30 June 2018. A private binding ruling was obtained to confirm the income tax benefit. Income tax expense/(benefit) comprises current and deferred tax and is calculated using rates enacted or substantively enacted at balance date. Current and deferred tax is recognised in profit 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. Vector’s current policy is to fully impute its dividend payments to shareholders. This has driven the recognition of a current income tax asset at 30 June 2019 of $52.4 million (2018: $84.7 million) and a non-current income tax asset of $52.3 million (2018: nil). The group intends to review its dividend and imputation policy during the year ended 30 June 2020 following confirmation of the Commerce Commission’s Default Price Path (DPP3) due on 28 November, 2019.
Other adjustments
Policies
Income tax asset
Imputation credits
There are no imputation credits available for use as at 30 June 2019 (2018: nil), as the imputation account has a debit balance as of that date.
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