. 107
ANNUAL
REPORT
20 1 7
THE BE ST
I N US
NOTESTOTHE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017
8.
INCOMETAXCREDIT (CONT’D)
(b)
Relationshipbetween taxcredit andaccounting loss
A reconciliation between tax credit and the product of accounting lossmultiplied by the applicable
corporate tax rate for the years ended31December are as follows:
Group
2017
2016
$’000
$’000
Accounting loss before tax
(11,283)
(9,222)
Income tax credit at the applicable tax rateof 17% (2016: 17%)
(1,918)
(1,568)
Adjustments for tax effect of:
Deferred tax assets not recognised
1,907
71
Incomenot subject to taxation
–
(501)
Tax incentive
(1,185)
(138)
Non-deductibleexpenses
941
2,573
Over provision in respect of prior years
(413)
(1,312)
Others, net
75
(20)
Income tax credit recognised inprofit or loss
(593)
(895)
At the end of the reporting period, the Group has tax losses of approximately $13,367,000
(2016: $2,147,000) that areavailable for offset against future taxableprofitsof the relevant subsidiary
in which the losses arose, for which no deferred tax asset is recognised due to the uncertainty of
its recoverability. The use of these tax losses is subject to the agreement of the tax authority and
compliancewithcertainprovisions of the tax legislation.
A loss-transfer system of group relief (the “Group Relief System”) for companies was introduced in
Singapore with effect from year of assessment 2003. Under the Group Relief System, a company
belonging to a group of entities may transfer its current year’s unabsorbed capital allowances,
unabsorbed trade losses and unabsorbed donations (loss items) to another company belonging to
the samegroup, tobededucted against the latter’s assessable income.
