Financial statements
Section B: Notes to the Group financial statements for the year ended 30 June 2024
Section B: Notes to the Group financial statements for the year ended 30 June 2024
B6 Income tax (continued) Transurban (USA) Holdings tax consolidated group
Transurban (USA) Holdings Inc (TUSAH) is the parent company of the TUSAH tax consolidated group. The TUSAH tax consolidated group includes the affiliated group of US corporations that are responsible for providing management services to the Group’s North American operations. The TUSAH tax consolidated group also owns membership interests in TC and AM Partners partnerships which are classified as partnerships for USFIT purposes. The TUSAH tax consolidated group includes its respective share of the TC and AMP partnerships' profits or losses in its US tax return. Transurban Cardinal Holdings Ltd Transurban Cardinal Holdings Ltd (TCH) owns membership interests in Skawanoti Holdings LP (SKHLP) which is classified as a partnership for Canadian income tax purposes. TCH includes its respective share of the SKHLP partnerships' profits or losses in its Canadian tax return. All entities within the Canadian structure are standalone entities for tax purposes. Pillar Two model rules The Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) published the Pillar Two model rules designed to address the tax challenges arising from the digitalisation of the global economy. The Pillar Two rules introduce a number of taxing mechanisms under which multinational enterprises with annual consolidated revenue equal to or above €750 million in at least two out of the immediate prior four years would pay a minimum level of tax. The new taxing mechanisms impose a top-up tax whenever the Pillar Two effective tax rate in a jurisdiction is below a 15% minimum rate. Various governments around the world have issued, or are in the process of issuing, legislation on this. The Group is within scope of the Pillar Two model rules as it is an applicable multinational enterprise group with annual consolidated revenue in excess of €750 million. The Pillar Two legislation has not been enacted or substantively enacted in the jurisdictions in which the Group operates, except for in Canada, which has an application date from 1 July 2024. Since the Pillar Two legislation was not effective as at 30 June 2024, the Group has no related current tax exposure. The Group applies the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes, as provided by AASB 2023-2 Amendments to Australian Accounting Standards – International Tax Reform – Pillar Two Model Rules , which was adopted in FY23. The Group has performed an assessment of the Group’s potential exposure to Pillar Two income taxes based on the current status of the Pillar Two model rules and on the most recent information available regarding the financial performance of the constituent entities in the Group. Based on the assessment, the Group does not currently expect any material exposure to Pillar Two top-up taxes. However, the Group will continue to monitor and evaluate the domestic implementation by relevant countries of the Pillar Two model rules, which continue to evolve to assess potential future implications. KEY ACCOUNTING ESTIMATE AND JUDGEMENT The Group is subject to income taxes in Australia, the United States of America 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 Australia, tax losses are generally carried forward indefinitely, subject to satisfaction of loss integrity measures; • In the United States of America, 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. Management have reviewed deferred tax assets with reference to the potential impact of the macroeconomic environment on forecast taxable income and have determined that it is probable that future taxable income will be available to utilise against deferred tax assets recognised as at 30 June 2024 in relation to deductible temporary differences and unused tax losses.
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