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KD Holding Group
Notes to Consolidated Financial Statements as at and for the year ended 31 December 2007
2.18 Income Tax
liabilities are recognised as income or expense in the
Group’s income statement unless the tax arises from a
2.18.1 Current income tax
The Group charges taxes in accordance with the
provisions of the legislation applicable in individual
countries in which the Group’s subsidiaries are located.
In Slovenia, the corporate income tax rate for the year
2007 is 23%. In 2008 the tax rate will be 22%, in
2009 21% and by 2010 the corporate income tax rate
will be reduced to 20%.
transaction that has been recognised directly in equity
or a business combination.
Deferred income tax is provided on temporary
differences arising on investments in subsidiaries and
associates, except where the Group controls the timing
of the reversal of the temporary difference and it is
probable that the temporary difference will not reverse
in the foreseeable future.
2.18.2 Deferred income tax
2.19 Employee benefits – other long-term employee
Deferred income tax is provided in full, using the balance
benefits
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sheet liability method, on temporary differences arising
between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements. this
In accordance with the initial recognition exemption,
deferred taxes are not recorded for temporary differences on
initial recognition of an asset or a liability in a transaction
other than a business combination if the transaction,
when initially recorded, affects neither accounting nor
taxable profit. Deferred income tax is determined using tax
rates (and laws) that have been enacted or substantively
enacted by the balance sheet date and are expected
to apply when the related deferred income tax asset is
realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the
extent that it is probable that future taxable profit
will be available against which the temporary
differences can be utilised.
The effects of recognising deferred tax assets and
The Group provides benefits to employees as a legal
obligation: jubilee rewards and retirement benefit bonuses.
According to Slovene legislation employees retire after 40
years of working life, when, if fulfilling certain conditions,
they are entitled to benefits paid in a lump sum amount.
Employees are also entitled to a long service bonus for
every ten years of employment with the Group.
The Group recognised all actuarial gains and losses
immediately in the income statement.
These liabilities are valued by an independent
certified actuary. The main actuarial assumptions
included in the calculations of the obligations for
long-term employee benefits are:
- discount rate of 4.5%,
- future salary increases using inflation index
increased by 4.8%,
- the rate of employee turnover of 4%.