Excel Force MSC Berhad Annual Report 2015

NOTES TO THE FINANCIAL STATEMENTS 31 December 2015 (cont’d) E X C E L F O R C E M S C B E R H A D • A N N U A L R E P O R T 2 0 1 5 90 26. TAX EXPENSE Group Company 2015 2014 2015 2014 RM RM RM RM Current year tax expense based on profit for the financial year 2,305,142 2,098,189 2,305,142 2,078,293 - Over-provision in prior year (60,460) (69,910) (63,155) (69,910) 2,244,682 2,028,279 2,241,987 2,008,383 Real property gains tax 109,814 - 109,814 - Deferred tax (Note 21) - Relating to origination and reversal of temporary differences (143,962) (446,190) (104,423) (470,689) - Effect of changes in tax rate (3,195) - (3,195) - - Over-provision in prior year (122,219) (100,691) (120,720) (104,430) (269,376) (546,881) (228,338) (575,119) 2,085,120 1,481,398 2,123,463 1,433,264 The subsidiaries, Insage (MSC) Sdn. Bhd. (‘Insage’), Capital Market Risk Advisor Sdn. Bhd. (‘CMRA’) and Winvest Global Sdn. Bhd. (‘Winvest’) have been awarded Multimedia Super Corridor status by the Government of Malaysia. Accordingly, there is no tax charge on the business income of the subsidiaries as the subsidiaries have been granted Pioneer Status under the Promotion of Investments Act, 1986. The Pioneer Status was for the period from 23 March 2014 to 22 March 2019, 26 November 2013 to 25 November 2018 and 16 October 2014 to 15 October 2019 for Insage, CMRA and Winvest respectively. The salient terms of the Pioneer Status are as follows: (i) 100% tax exemption on business income; (ii) unabsorbed pioneer capital allowances can be carried forward to the post pioneer period and deducted against the post-pioneer income of a business relating to the same promoted activity or promoted product; and (iii) unabsorbed pioneer losses can be carried forward to the post pioneer period and deducted against the post-pioneer income of a business relating to the same promoted activity or promoted product. The Malaysian income tax is calculated at the statutory tax rate of 25% (2014: 25%) of the estimated taxable profit for the fiscal year. The Malaysian statutory tax rate will be reduced to twenty-four percent (24%) for the fiscal year of assessment 2016 onwards.