MISC Annual Report 2017

NOTES TO THE FINANCIAL STATEMENTS MISC BERHAD | Annual Report 2017 208 9. TAXATION (CONT'D.) A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Corporation is as follows: Group Corporation 2017 RM'000 2016 RM'000 2017 RM'000 2016 RM'000 Profit before taxation 2,003,580 2,813,967 1,663,552 1,996,092 Taxation at Malaysian statutory tax rate of 24% (2016: 24%) 480,859 675,352 399,252 479,062 Effect of different tax rates in other countries/jurisdictions (320,081) (114,243) - - Effect of reduction in tax rate on deferred tax recognised - 144 - - Income not subject to tax: Tax exempt shipping income (718,730) (606,914) (186,489) (130,513) Others (73,147) (340,056) (426,497) (428,725) Expenses not deductible for tax purposes 770,703 541,135 265,293 145,499 Effect of share of results of associates and joint ventures (46,748) (69,133) - - Utilisation of previously unrecognised tax losses (51,559) (65,033) (51,559) (65,323) Utilisation of previously unrecognised unabsorbed capital allowances - (23) - - Deferred tax assets recognised on unutilised investment tax allowances (17,732) - - - Deferred tax assets not recognised on unutilised investment tax allowances - 5,798 - - Deferred tax (over)/under provided in prior year (3,562) 25,847 - - Income tax over provided in prior year (7,114) (32,183) - - Taxation for the year 12,889 20,691 - - The Government had proposed to reduce the exemption for the shipping sector provided under Section 54A of the Income Tax Act, 1967 ("the Act") from 100% to 70% of statutory income effective from Year of Assessment ("YA") 2012. Subsequently in December 2015, the Government has decided to defer the implementation of the above proposal to YA2020.