FGV Annual Report 2017

ANNUAL INTEGRATED REPORT 2017 FINANCIAL STATEMENTS 195 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 14 TAXATION (CONTINUED) A reconciliation of income tax expense applicable to profit before taxation after zakat at the Malaysian statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is as follows: Group Company 2017 RM’000 2016 RM’000 2017 RM’000 2016 RM’000 Profit/(loss) before taxation after zakat 411,534 242,537 125,451 (46,062) Malaysian corporate tax rate of 24% (2016: 24%) 98,768 58,209 30,108 (11,055) Tax effect of: - different tax rates in other countries 13,648 6,258 - - - expenses not deductible for tax purposes 90,376 94,177 35,379 58,349 - income not subject to tax (38,755) (52,602) (86,023) (59,766) - under/(over) provision of income tax in prior financial year 1,843 (25,240) 4,553 - - deferred tax assets not recognised 40,485 44,060 20,665 12,472 - tax incentive (7,962) (6,734) - - - temporary differences previously not recognised as deferred tax (3,160) 57,031 - 24,873 - impact of transfer pricing adjustments 10,826 - - - - others (2,581) 919 - - Tax expense 203,488 176,078 4,682 24,873 During the financial year, additional tax liabilities of RM10,826,000 and RM4,842,000 had been recognised by the Group, which arose from transfer pricing adjustments in respect of certain intercompany transactions in 2017 and 2016 respectively.