Income tax in interim periods
For the purposes of interim
financial reporting, the Company
determines the appropriate income
tax provision by first applying
the effective
tax rate
expected to
be applicable
for the
full fiscal
year to
ordinary income.
This amount
is then
adjusted for
the tax
effect
of
significant
unusual
items,
for
instance,
changes
in
tax
law,
valuation
allowances
and
non-deductible
transaction-related
expenses that
are reported
separately,
and have an
impact on the
tax charge.
The cumulative effect
of any change
in the enacted
tax
rate, if and when applicable, on the opening balance of deferred tax assets
and liabilities is also included in the tax charge as a discrete
event in the interim period in which the enactment date occurs.
For
the
three
and
six
months
ended
December
31,
2025,
the Company’s
effective
tax
rate
was impacted
by
the
tax
expense
recorded by
the Company’s
profitable South
African operations,
non-taxable income
(including the
fair value
adjustment on
equity
securities and
other income)
and non-deductible
and expenses
(including transaction-related
expenditures). The
Company’s
income
tax benefit
was impacted by
a higher deferred
tax benefit as
a result of
the reduction in
the useful lives
of certain of
the Company’s
brand and trademark intangible assets which has
resulted in an increase in
amortization expense during the three and
six months ended
December 31, 2025.
For
the
three
and
six
months
ended
December
31,
2024,
the Company’s
effective
tax
rate
was impacted
by
the
tax
expense
recorded by the
Company’s profitable South African operations,
non-deductible expenses (including transaction-related expenditures),
the on-going
losses incurred
by certain of
the Company’s
South African
businesses and the
associated valuation
allowances created
related to the deferred tax assets recognized regarding net operating losses incurred
by these entities.
Uncertain tax positions
As of
December 31,
2025 and
June 30,
2025, the
Company had
no
unrecognized tax
benefits. The
Company files
income tax
returns mainly
in South
Africa, Botswana,
Namibia and
in the
U.S. federal
jurisdiction. As
of December
31, 2025,
the Company’s
South African subsidiaries are no
longer subject to income tax examination
by the South African Revenue Service
for periods before
June
30,
2020.
The Company
is subject
to
income
tax
in
other
jurisdictions
outside
South
Africa,
none
of
which
are
individually
material to its financial position, statement of cash flows, or results of operations.