Year ended Dec 2024 $’000 Year ended Dec 2023 $’000 (Over)/under provision in prior years (3,413) – Utilisation of previously unrecognised tax losses (3,233) (13,905) Recognition of deferred tax asset for carried forward tax losses (10,428) – Recognition of deferred tax asset for deductible temporary differences – (689) Adjustment to deferred tax balances as a result of change in statutory tax rate – (138) Difference in overseas tax rates (199) (133) Income tax expense 40,897 48,059 1 For the year ended 31 December 2024, an adjustment to tax expense was made for foreign income tax offsets unable to be used. For the year ended 31 December 2023, the adjustment to tax expense relates to the utilisation of a foreign income tax offset rather than previously unrecognised tax losses in relation to the prior year income tax return. $17.0m of New Zealand gross tax losses were recognised as credits to the income tax expense in the current financial year, being $6.6m to offset taxable income from the current and previous financial years, and $10.4m recorded as a deferred tax asset. As at 31 Dec 2024 $’000 As at 31 Dec 2023 $’000 Current tax liabilities Opening balance 37,119 – Income tax 52,523 48,102 Withholding tax credits (6,468) (10,983) Over provision in prior years (3,045) – Tax paid during the year (37,221) – Other (42) – Closing balance 42,866 37,119 As at 31 Dec 2024 $’000 As at 31 Dec 2023 $’000 Deferred tax asset Deferred tax asset comprises temporary differences attributable to: Amounts recognised in profit or loss: Patents 66 197 Capital raising costs 73 199 Employee benefits 163 139 Unrealised foreign exchange (408) 668 Interest receivable – (459) Tax losses (a) 10,428 – Other temporary differences 26 27 Deferred tax asset 10,348 771 Movements: Opening balance 771 – Credited to profit or loss 9,211 771 Over provision in prior years 366 – Closing balance 10,348 771 Gross tax losses for which no deferred tax asset has been recognised (a) – 62,475 (a) At 31 December 2023, there were $62.5 million of New Zealand gross tax losses for which no deferred tax asset was recognised. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED 8. INCOME TAX (CONTINUED) Neuren Pharmaceuticals Limited Annual Report 2024 36
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