49 Annual Report 2022 6 INCOME TAX (a) Major components of income tax credit for the periods presented are: For the year ended 30 June 2022 $ For the year ended 30 June 2021 $ Statement of comprehensive income Current income tax charge - - Decrease/(Increase) in deferred tax liability on intangible assets 704,421 - Increase in deferred tax asset on losses brought to account* 1,354,092 2,874,805 Income tax credit reported in the Statement of Comprehensive Income 2,058,513 2,874,805 * Relates to the recognition of INOVIQ Ltd tax losses for the 2021, 2020, 2019, 2018 and 2017 financial years, and an estimated tax loss for the 2022 financial year, to offset the deferred tax liability required to be recognised on the value of the hTERT, Molecular NETS and SubB2M intangible assets acquired in the merger with Sienna. (b) A reconciliation of income tax expense applicable to accounting loss, before income tax at the statutory income tax rate, to income tax expense at the Group’s effective income tax rate for the periods ended 30 June 2022 and 30 June 2021 is as follows: For the year ended 30 June 2022 $ For the year ended 30 June 2021 $ Accounting loss before tax (20,254,490) (14,025,684) At statutory income tax rate of 25% (2021: 26%) (5,063,623) (3,646,678) Deferred tax asset brought to account (619,593) (464,184) Amortisation of intangible assets 419,352 128,100 Impairment of goodwill and intangible asset - hTERT (2021: Molecular NETs) 3,205,351 1,107,957 Income tax credit reported in the Statement of Comprehensive Income 2,058,513 2,874,805 Estimated temporary differences total $166,930 as at 30 June 2022 (2021: $160,474). Estimated total tax losses not brought to account total $3,377,249 at 30 June 2022 (2021: $4,234,576). Total estimated tax losses include the carried forward tax losses reported in the wholly owned subsidiary Sienna Cancer Diagnostics Ltd (Sienna) and subsidiary corporate tax returns lodged with the Australian Taxation Office up to 28 July 2020. An accounting firm has been engaged to assess the Group’s ability to realise Sienna’s tax losses in future, utilising the Continuity of Ownership Test (COT) or Similar Business Test (SBT). Tax losses incurred by foreign subsidiaries BARD1AG S.A. and INOVIQ Inc. (formerly Sienna Cancer Diagnostics Inc.) are not included in estimated tax losses not brought to account. It is not probable that the Group will be in a position to utilise these tax losses in future. Some deferred tax assets have not been brought to account at 30 June 2022 because the directors do not believe it is appropriate to regard realisation of the future tax benefit as probable. These benefits will only be obtained if: (i) t he Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deduction for the loss to be realised; (ii) t he Group complies with the conditions for the deductibility imposed by law including the continuity of ownership and/or business tests; and (iii) no changes in tax legislation adversely affect the Group in realising the benefit from the deduction for the loss.
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