Australia Post Annual Report 2008–09
Australia Post Annual Report 2008–09
Australia Post Annual Report 2008–09
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5 Income tax (continued)<br />
(e) Unrecognised temporary<br />
differences<br />
At 30 June 2009, there were no unrecognised<br />
temporary differences (2008: $nil) associated<br />
with the group’s investments in controlled<br />
entities or jointly controlled entities, as the<br />
group had no liability for additional taxation<br />
should unremitted earnings be remitted.<br />
(f) Tax consolidation<br />
The <strong>Australia</strong>n <strong>Post</strong>al Corporation and its<br />
100% owned <strong>Australia</strong>n resident subsidiaries<br />
formed a tax consolidated group with effect<br />
from 1 July 2004. The <strong>Australia</strong>n <strong>Post</strong>al<br />
Corporation is the head entity of the tax<br />
consolidated group. Members of the group<br />
have entered into a tax sharing arrangement<br />
in order to allocate income tax expense to the<br />
wholly owned subsidiaries on a pro-rata basis.<br />
In addition, the agreement provides for the<br />
allocation of income tax liabilities between<br />
the entities should the head entity default<br />
on its tax payment obligations.<br />
No amounts have been recognised in<br />
the financial statements in respect of this<br />
agreement on the basis that the possibility<br />
of default is remote.<br />
Tax effect accounting by members<br />
of the tax consolidated group<br />
Members of the tax consolidated group<br />
have entered into a tax funding agreement.<br />
The tax funding agreement provides for the<br />
allocation of current taxes to members of the<br />
tax consolidated group in accordance with<br />
their contribution to the actual tax payable by<br />
the head entity for the period, while deferred<br />
taxes are allocated to members of the tax<br />
consolidated group in accordance with the<br />
principles of AASB 112 Income Taxes and<br />
UIG 1052 Tax Consolidation Accounting.<br />
Allocations under the tax funding agreement<br />
are made on an annual basis.<br />
The allocation of taxes under the tax<br />
funding agreement is recognised as an<br />
increase/decrease in the subsidiaries’<br />
intercompany accounts with the tax<br />
consolidated group head company, the<br />
<strong>Australia</strong>n <strong>Post</strong>al Corporation. Because under<br />
UIG 1052 Tax Consolidation Accounting the<br />
allocation of current taxes to tax consolidated<br />
group members on the basis of accounting<br />
profits is not an acceptable method of<br />
allocation given the group’s circumstances,<br />
the difference between the current tax<br />
amount that is allocated under the tax funding<br />
agreement and the amount that is allocated<br />
under an acceptable method is recognised<br />
as a contribution/distribution of the<br />
subsidiaries’ equity accounts. The group<br />
has applied the group allocation approach<br />
in determining the appropriate amount<br />
of current taxes to allocate to members<br />
of the tax consolidated group.<br />
The amounts receivable or payable under<br />
the tax funding agreement are due upon<br />
receipt of the funding advice from the head<br />
entity, which is issued as soon as practicable<br />
after the end of each financial year. The head<br />
entity may also require payment of interim<br />
funding amounts to assist with its obligations<br />
to pay tax instalments.<br />
All tax-related contingencies are included<br />
in the Schedule of contingencies.<br />
<strong>Australia</strong> <strong>Post</strong> <strong>Annual</strong> <strong>Report</strong> <strong>2008–09</strong> | Financial and statutory reports 75