ZaraAnnual-English2013

23. Income Tax
Deferred tax liabilities -
Deferred tax liabilities represent the estimated income tax on unrealized gain from financial assets at fair value through other
comprehensive income which appear in the cumulative change in fair value in equity.
Movement on deferred tax liabilities is as follows:
2013 2012
Beginning balance 218,000 227,236
Change in fair value for the year (13,552) ( 9,236)
Ending balance 204,448 218,000
JD
JD
Below table shows the reconciliation between the accounting profit before income tax and taxable income:
2013 2012
JD
JD
Accounting (loss) profit before tax (545,937) 2,297,538
Losses of the Company and other subsidiaries 4,020,870 5,303,932
Carried forward losses 73,937 (1,135,935)
Non-taxable income (55,984) (62,150)
Non-deductible expenses 458,540 402,083
Taxable income 3,951,426 6,805,468
Income tax expense for the year 459,327 723,500
Statutory tax rate 5% - 14% 5% - 14%
Effective tax rate - 31.5%
Income tax -
The income tax stated on the consolidated income statement represents the following:
2013 2012
Current year income tax 459,327 723,500
Prior years income tax 44,999 26,148
Movement on provision for income tax is as follows:
JD
JD
504,326 749,648
2013 2012
Beginning balance 529,367 398,790
Income tax for the year 459,327 723,500
Income tax for prior years 44,999 26,148
Income tax paid (668,155) (619,071)
JD
JD
The income tax provision represents income tax due on the results of operations of some of the Company’s subsidiaries. No
income tax provision was calculated for the Company and a number of its subsidiaries for 2013 due to the excess of deductible
expenses over taxable revenues, or due to accumulated losses from prior years, in accordance with the Temporary Income Tax
Law No. (28) of 2009.
The Income Tax Department has not reviewed the Company’s and its subsidiaries records, except for Levant Hotels and Tourism
Company and Amman Tourism Investment Company for 2012, up to the date of these consolidated financial statements.
The Income Tax Department has reviewed the accounting records of Amman Tourism Investment Company for 2012.
The Company, Red Sea Hotels Company, and Zara South Coast Development Company have obtained final clearances from
the Income Tax Department for all years up to 31 December 2009.
Jordan Himmeh Mineral Company, Nabatean Hotels Company, Rum Hotels and Tourism Company, Oasis Hotels Company,
Zara Agricultural Company, and South Coast Real Estate Development Company have obtained final clearances from the
Income Tax Department up to 2010.
Jordan Hotels and Tourism Company, Amman Tourism Investment Company, National Hotels and Tourism Company, and
South Coast Hotels Company have obtained final clearances from the Income Tax Department up to 2011.
Levant Hotels and Tourism Company has obtained a final clearance from the Income Tax Department up to 2012.
Reversal (2,829) -
Ending balance 362,709 529,367
84 Consolidated Financial Statements Annual Report 2013 85