13. Deferred tax assets and liabilities

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. But the deferred tax is not accounted for if it arises from initial recognition of an asset or a liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable income statement. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised, or the deferred tax liability is settled.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by TMF Group and it is probable that the temporary difference will not be reversed in the foreseeable future.

Deferred tax assets and deferred tax liabilities are offset to extent that an entity has a legally enforceable right to set off current tax assets against current tax liabilities and are levied by same taxation authority.

The gross movement in the deferred tax account is as follows:

The movement in deferred tax assets and liabilities during the year is as follows:

Deferred tax assets

The deferred tax asset for tax losses is to a great extent dependent on future taxable profits. The category Other deferred tax asset consists of a €1 million deferred tax asset recognised for contracts that are, or contain, a lease as per requirements set out in IFRS 16 Leases.

Deferred tax liabilities

The category other includes outside base difference of €2.3 million.

An overview of the non-capitalised losses and carry forward interest expenses is depicted below:

The tax losses and non-deductible interest expenses available in the Netherlands can be carried forward indefinitely, but the losses are limited to 50% of the taxable income. The losses in Brazil can be carried forward indefinitely but are limited to 30% of the taxable income. The losses in Curaçao can be carried forward for 10 years. The losses in Switzerland can be carried forward for 7 years. The losses in Singapore can be carried forward indefinitely and are subject to a shareholding test.