7.4 Reconciliation of tax rates

	Group		Company
For the year ended 31 December	2019 %	(Re-presented) 2018 %	2019 %	2018 %
Tax as a percentage of profit/(loss) before tax from continuing operations	10.9	19.3	0.3	(9.2)
Tax effect of:
– Net capital gains¹	1.0	0.2	1.2	9.5
– Expenses not deductible for tax purposes²	1.5	(1.6)	2.2	(4.8)
– Exempt income (not subject to tax)³		0.1	24.4	33.6
– Special tax allowances	0.1	0.1
– Post-tax equity-accounted income⁴	14.7	10.4
– Remeasurements of foreign tax rate differences	0.3	0.6
– Prior year tax adjustments⁵	1.4	(0.4)	(0.1)	(1.1)
– Deferred tax assets not recognised⁶	(1.6)	(0.1)
– Imputed income from controlled foreign companies and investments	(0.3)	(0.6)
Standard tax rate	28.0	28.0	28.0	28.0
Effective tax rate for continuing operations, excluding income from equity-accounted investments	22.9	30.3
¹ Redemption of membership interest in Tronox UK.
² Expenses not deductible for tax purposes:	1.5	(1.6)	2.2	(4.8)
– Consulting, legal and other professional fees	(0.7)	(0.4)	(1.1)	(1.4)
– ESD grants	(0.1)	(0.1)	(0.2)	(0.5)
– Share-based payments	1.3	0.5	1.5	1.2
– Penalties and interest on taxes	(0.1)	(0.1)		0.1
– Contingent consideration fair value adjustment	1.3	(1.2)	2.2	(4.2)
– Other	(0.2)	(0.3)	(0.2)

³	For company, mainly includes dividend income from equity-accounted investments.
⁴	The increase is as a result of the increase in the SIOC equity-accounted income (refer note 9.3).
⁵	For group, a significant part of the prior year adjustments relates to:
⁵	(i) An overprovision in the prior years of an income tax liability as a result of a controlled foreign company imputation that was disputed by SARS. A settlement was reached with SARS and therefore the prior year overprovision has been reversed in the current year.
⁵	(ii) The most favoured nation court ruling was issued during the 2019 tax year and as a result Exxaro International BV’s withholding tax previously paid in the Netherlands was refunded.
	For company, the prior year adjustment relates to the correction of the prior years’ fair value adjustment on the ECC contingent consideration incorrectly claimed for tax purposes. SARS approved a voluntary disclosure programme application in this regard.
⁶	The majority of the deferred tax assets not recognised comprises assets relating to tax losses, provisions and unredeemed capital expenditure.

Exxaro report selector 2019