INCOME TAXES

12 Months Ended

Dec. 31, 2023

Income taxes are recognized for the amount of taxes payable by our company and its corporate subsidiaries, and for the impact of deferred tax assets and liabilities related to such subsidiaries.

(a)Deferred Income Tax Balances

The sources of deferred income tax balances are as follows:


	As of December 31,
US$ MILLIONS	2023		2022
Deferred income tax assets
Financial instruments and other	$	18	$	41
Tax losses carried forward	38		37
	$	56	$	78
Deferred income tax liabilities


Long-lived assets	$	(2,151)	$	(1,573)
Net deferred income tax liabilities	$	(2,095)	$	(1,495)
Reflected in the statement of financial position as follows:
Deferred tax assets	$	40	$	43
Deferred tax liabilities	(2,135)		(1,538)
Net deferred tax liabilities	$	(2,095)	$	(1,495)

The deferred tax asset related to losses available for carry forward includes $38 million (2022: $37 million) of tax benefits that have been recognized based on projections of future taxable profits.

The sources of deferred income tax balances and movements are as follows:


			Recognized in
US$ MILLIONS	Jan. 1, 2023		Net Income		Other Comprehensive Income		Other(1)		Acquisitions/Dispositions		Dec. 31, 2023
Deferred tax assets related to non-capital losses and capital losses	$	37	$	(2)	$	—	$	2	$	1	$	38
Deferred tax liabilities related to differences in tax and book basis, net	(1,532)		(18)		(34)		(104)		(445)		(2,133)
Net deferred tax liabilities	$	(1,495)	$	(20)	$	(34)	$	(102)	$	(444)	$	(2,095)


			Recognized in
US$ MILLIONS	Jan. 1, 2022		Net Income		Other Comprehensive Income		Other(1)		Acquisitions/Dispositions		Dec. 31, 2022
Deferred tax assets related to non-capital losses and capital losses	$	43	$	(1)	$	—	$	(5)	$	—	$	37
Deferred tax liabilities related to differences in tax and book basis, net	(1,629)		80		(14)		31		—		(1,532)
Net deferred tax liabilities	$	(1,586)	$	79	$	(14)	$	26	$	—	$	(1,495)

(1)Other items relate to foreign exchange as deferred income taxes are calculated based on the functional currency of each operating entity.

The amount of non-capital losses for which no deferred income tax assets have been recognized is approximately $41 million (2022: $59 million). Deferred tax assets not recognized relating to non-capital losses of $2 million (2022: $2 million) will be carried forward indefinitely and $39 million (2022: $57 million) will be carried forward for greater than five years from the reporting date.

(b)Income Tax Recognized in Income or Loss

The major components of income tax expense include the following:


	For the year ended December 31,
US$ MILLIONS	2023		2022		2021
Tax expense comprises:
Current income tax expense	$	348	$	341	$	234
Deferred income tax expense
Origination and reversal of temporary differences	22		16		59
Change in tax rates or the imposition of new taxes	4		—		96
Deferred tax assets (recognized)/not recognized	(6)		(95)		16
Total income tax expense	$	368	$	262	$	405
Income tax on income before tax and non-controlling interests reconciles to tax expense as follows:
Net income before income tax and non-controlling interests	$	974	$	1,881	$	432
Income tax expense calculated at the domestic rates applicable to profits in the country concerned	328		576		179
Change in tax rates and new legislation	4		—		96
International operations subject to different tax rates	6		(1)		(2)
Taxable income attributable to non-controlling interests	—		(2)		(4)
Portion of gains subject to different tax rates	—		—		(37)
Deferred tax assets (recognized)/not recognized	(6)		(95)		16
Foreign exchange	(6)		12		2
Non-deductible dividends on exchangeable shares	47		42		30
Non-deductible remeasurement adjustments on exchangeable and class B shares	(9)		(280)		119
Permanent differences and other	4		10		6
Income tax expense recognized in profit or loss	$	368	$	262	$	405

Our company has no temporary differences associated with investments in subsidiaries for which no deferred income taxes have been provided.

(c)Income Tax Recognized Directly in Other Comprehensive Income


	For the year ended December 31,
US$ MILLIONS	2023		2022		2021
Deferred tax arising on income and expenses recognized in other comprehensive income
Revaluation of property, plant and equipment	$	36	$	25	$	121
Cash flow hedges	6		(19)		—
Other	(8)		8		—
Total income tax recognized directly in other comprehensive income	$	34	$	14	$	121