NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2024 2. Summary of material accounting policies information (cont’d) 2.26 Taxes (cont’d) (b) Deferred tax (cont’d) Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the end of each reporting period. Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition. The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered. (c) Value-added tax (“VAT”) Revenues, expenses and assets are recognised net of the amount of VAT except: – Where the VAT incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the VAT is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and – Receivables and payables that are stated with the amount of VAT included. The net amount of VAT recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the consolidated balance sheet. (d) Pillar Two tax rules The Group is in scope of the Organisation for Economic Co-operation and Development’s (“OECD”) Pillar Two model rules as its consolidated annual revenue is more than EUR750 million (approximately Rp12.7 trillion). Under the legislation, the Group is liable to pay a top-up tax for the difference between the Global Anti-Base Erosion Rules (“GloBE”) effective tax rate for each jurisdiction and the 15% minimum rate. Pillar Two legislation was enacted in Singapore and Indonesia, the jurisdictions the Group operates in, 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 Indofood Agri Resources Ltd. 94
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