197 ANNUAL REPORT 2025 Notes to the Financial Statements For the financial year ended 31 December 2025 22 INCOME TAX EXPENSE Group 2025 2024 US$’000 US$’000 Current income tax: Current income tax charge 350 350 Overprovision in prior financial years (53) (23) 297 327 Deferred tax: Deferred tax charge 3,966 5,140 Overprovision in prior financial years (2) (202) 3,964 4,938 Income tax expense reported in the consolidated statement of comprehensive income 4,261 5,265 The income tax for the period can be reconciled to the accounting result based on U.S. tax rate of 21.0% as all properties are based in the U.S., as follows: Group 2025 2024 US$’000 US$’000 Net income before tax 25,119 35,382 Tax calculated using U.S. tax rate of 21.0% 5,275 7,430 Tax effect of expenses not deductible for tax purposes 10,086 9,505 Tax effect of income not subjected to tax (11,629) (12,123) Overprovision of prior year income tax (55) (225) Effect of different tax rate in state jurisdictions 584 678 4,261 5,265 Provision for taxation Uncertainties exist with respect to the interpretation of complex tax regulations in the jurisdictions in which the Group operates and the amount and timing of future taxable income. Given the span of tax regulations which may apply to the various taxable entities or persons within the Group, the cross-border and long-term nature and complexity of the contractual arrangements and the conditions to the tax rulings which have been obtained, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax provisions recorded or require new or additional tax provisions to be recorded. The Group establishes provisions, based on reasonable estimates, for anticipated tax liabilities or possible consequences of audits by the tax authorities of the respective jurisdictions in which it operates. The amount of such provisions is based on various factors, such as differing interpretations of tax regulations between the taxable entity or person involved and the relevant tax authority and anticipated future changes in the tax laws that may have a direct impact on any tax ruling or favourable tax treatment relied upon. Such instances may arise on a wide variety of issues depending on the conditions prevailing in the domicile of the respective entity or person involved.
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