Kasbah Resources Limited Annual Report 2018

42 Kasbah Resources Limited Annual Report 2018 5. INCOME TAX EXPENSE Consolidated 2018 $ 2017 $ a) Income tax expense (benefit) Current tax expenses (benefit) – – Deferred tax expenses (benefit) – – – – b) Reconciliation of the prima facie tax loss from ordinary activities before income tax to income tax expense (benefit): Profit/(Loss) before income tax expense (6,343,602) (5,204,945) Tax at the tax rate 27.5% (2017: 27.5%) (1,744,491) (1,431,360) Tax effect of amounts not deductible (taxable) in calculating taxable income: – Non-deductible expenses 607,947 522,924 – Benefit of deferred tax assets not previously recognised – (29,006) – Deferred tax assets not recognised on tax losses and temporary difference 766,144 785,885 – Tax rate differential 370,400 151,557 Income tax expense (benefit) – – c) Deferred tax assets Temporary differences 1,013 969 1,013 969 Deferred tax liabilities Temporary differences (1,013) (969) (1,013) (969) Net deferred tax assets (liabilities) – – d) Deferred tax assets not recognised Deferred tax assets have not been recognised in relation to the following matters: Temporary differences 880,651 842,610 Tax losses 9,597,693 8,507,766 10,478,344 9,350,376 Significant accounting judgement Tax Losses No deferred tax asset has been recognised on the unused tax losses as the future recovery of those losses is subject to the Company satisfying the requirements imposed by the regulatory taxation authorities in the relevant jurisdictions. The benefits of deferred tax assets not brought to account will only be brought to account if: – future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised; – the conditions for deductibility imposed by tax legislation continue to be complied with; and – no changes in tax legislation adversely affect the Company in realising the benefit. Taxes The Group is subject to various taxes in Australia and offshore jurisdictions and at times significant judgement is required in determining the Group’s liability associated with these taxes. The Group estimates its tax liabilities based on its understanding of the transactions and the tax laws in the local jurisdictions in which it operates. Should the final outcome of these matters be different from the initial assessment, such differences will impact the Group’s liabilities in the period in which such determination is made. Notes to the Consolidated Financial Statements – continued