Annual Report 2006 - Venture Corporation Limited

notes to financial statements
December 31, 2006
27 INCOME TAX EXPENSE
The Group
2006 2005
$’000 $’000
Income tax on profit for the year:
Current year - Singapore 10,800 4,256
- Foreign 2,883 2,855
Overprovision in prior years (1,461) (576)
Deferred income tax (Note 21):
Current year (584) (18)
Overprovision of deferred tax liabilities in prior years - (1,108)
Total 11,638 5,409
The income tax expense varied from the amount of income tax expense determined by applying the Singapore income
tax rate of 20% (2005: 20%) to profit before income tax as a result of the following differences:
The Group
2006 2005
$’000 $’000
Income tax expense at statutory tax rate 50,516 41,417
Non allowable items 872 3,378
Overprovision of income tax in prior years, net (1,461) (1,684)
Prior year’s tax loss carryforwards utilised (2) (1,479)
Deferred tax benefits not recognised 236 2,511
Effect of different tax rates of overseas operations 8,863 9,327
Tax exempt income (47,352) (48,126)
Utilisation of deferred tax benefits previously not recognised (22) -
Other items (12) 65
Total income tax expense 11,638 5,409
Effective tax rate 4.61% 2.61%
The income tax expense for the group is less than the amount determined by applying the statutory tax rates primarily
due to tax incentives granted to the company and its subsidiaries.
The Economic Development Board (“EDB”) of Singapore granted the company for a period of five years commencing
August 1, 1999, with an extension of two years to the pioneer status if it satisfies additional conditions stipulated. With
the expiry of the Pioneer Status on July 31, 2006, the company has applied for new tax incentive and has provided for
tax at 20% on taxable profits from August 1, 2006 to December 31, 2006.
EDB has also granted a subsidiary, Venture Electronics Solutions Pte Ltd, Pioneer Status and Development and Expansion
Incentive for qualifying activities subject to the fulfilment of certain conditions, for a period of five years commencing
on July 1, 2002.
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