Mandarin Oriental International Limited - Mandarin Oriental Hotel ...

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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
6 Tax
Company and subsidiaries
MANDARIN ORIENTAL INTERNATIONAL LIMITED
Restated
2005 2004
US$m US$m
– Current tax 12.7 9.1
– Deferred tax (refer note 13) 12.1 (4.3)
24.8 4.8
Analysis by geographical area
– Hong Kong and Macau 8.0 6.7
– Other Asia 1.7 0.6
– Europe 1.3 (2.1)
– The Americas 13.8 (0.4)
24.8 4.8
Analysis by activity
– Hotel ownership 22.4 3.1
– Hotel management 2.4 1.7
24.8 4.8
Reconciliation between tax expense and tax at the applicable tax rate:
Tax at applicable tax rate 19.3 (4.1)
Expenses not deductible for tax purposes 3.5 1.7
Tax losses not recognized 4.0 8.3
Temporary differences not recognized 4.1 3.2
Utilization of previously unrecognized tax losses (16.9) (0.4)
Utilization of previously unrecognized temporary differences (2.6) (2.2)
Recognition of previously unrecognized deferred tax assets (0.8) (2.4)
Recognition of previously unrecognized temporary differences 12.1 (1.3)
Deferred tax assets written off 0.6 0.5
Withholding tax 1.4 1.4
Under provision for prior years 0.1 0.1
24.8 4.8
The applicable tax rate represents the weighted average of the rates of taxation prevailing in the territorities in
which the Group operates.
Included in the 2005 taxation is a tax charge of US$14.2 million (2004: nil) arising on the disposal of the Group’s
40% investment in Kahala Mandarin Oriental, Hawaii.This tax charge is calculated after utilizing brought forward
tax losses in the United States of approximately US$65.1 million and comprises current tax of US$2.5 million and
deferred tax of US$11.7 million arising on temporary differences (refer note 5).