NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2024 11. Income tax expenses (cont’d) Relationship between tax expense and accounting profit A reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporate tax rate for the years ended 31 December are as follows: Group 2024 2023 Rp million Rp million Profit before tax as per consolidated statement of comprehensive income 2,938,224 1,526,877 Tax at the Singapore tax rate of 17% (2023: 17%) 499,498 259,569 Effect of tax rates in foreign jurisdictions 117,068 80,593 Income already subjected to final tax (59,648) (48,517) Non-deductible expenses 158,218 123,851 Adjustments in respect of previous years 113,071 175,161 Income tax expense recognised in the consolidated statement of comprehensive income 828,207 590,657 The corporate income tax rates in Indonesia are as follows: (a) 22% effective starting Fiscal Year 2022; and (b) Resident publicly listed companies in Indonesia whose at least 40% or more of the total paid-up shares or other equity instruments are listed for trading in the Indonesia stock exchange and meet certain requirements in accordance with the government regulations, are entitled for 3% reduction of the rate stated in point (a) above. For the financial years ended 31 December 2024 and 2023, the corporate tax rates for companies in Singapore and Indonesia were 17% and 22% (2023: 17% and 22%) respectively. A subsidiary in Indonesia applies 19% (2023: 19%) tax rate instead of the normal tax rate of 22% (2023: 22%) in computing its income tax expense for the reporting period due to its fulfilment to qualify for a reduced corporate income tax rate. Adjustments in respect of previous years largely related to unrecoverable tax losses as a result of expired tax losses for which deferred tax assets have been recognised and changes in assumptions used in the estimation of future taxable profits. The Group is in scope of the Pillar Two model as regulated in SFRS(I) 1-12 because the Group is a multinational enterprise and the annual revenue of the Group exceeded EUR750 million (approximately Rp12.7 trillion) per consolidated financial statements. Pillar Two legislation was enacted in Singapore, the jurisdiction in which Indofood Agri Resources Ltd is incorporated, and will come into effect from 1 January 2025. Since Pillar Two legislation was not effective at the reporting date, the Group has no related current tax exposure. The Group applies the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes. The Group is in the process of assessing its exposure to the Pillar Two legislation as at 31 December 2024. The Pillar Two model rules are complex, and management is evaluating its potential impact on the Group, if any. Based on the information available to date, management does not expect any material impacts as the tax rates in the countries where the Group operates exceeded the minimum tax rate of 15%. Group Overview Financials Other information Sustainability and Governance Operation and Financial Review Annual Report 2024 105
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