Notes to the Consolidated Financial Statements continued ANNUAL Report June 2025 Notes to the Consolidated Financial Statements 24 4. INCOME TAX 2025 $ 2024 $ (a) Reconciliation of income tax expense to prima facie tax payable Profit / (loss) before income tax (39,228,351) (14,425,051) Tax at the statutory rate of 25% (30 June 2024: 25%) (9,807,088) (3,606,263) Tax effect of amounts which are not taxable in calculating taxable income: Non-deductible expenses 2,472,770 2,134,981 Non-assessable income - (6,932,501) Deferred tax assets not recognised 7,334,318 8,403,782 Income tax benefit - - (b) Unrecognised deferred tax assets Balance at beginning of year 10,022,894 5,330,712 Current year not recognised 8,053,146 5,624,283 Adjustments in respect of prior year tax balances (683,667) (932,101) Balance at end of year 17,392,373 10,022,894 Deferred tax assets have not been recognised in respect of the following items: Tax losses 19,853,052 14,279,183 Less: other timing differences (2,460,679) (4,256,289) Net deferred tax assets 17,392,373 10,022,894 No income tax provision is considered necessary for the Company for the period ending 30 June 2025. Deferred tax assets have not been recognised in respect of these items because it is not probable that these assets will be realised in the short to medium term. The Group has total tax losses at 30 June 2025 of $79,412,208 (2024: $57,116,732). A future income tax benefit which may arise from tax losses of 25% of approximately $19,853,052 will only be obtained if: ▪ the parent and the subsidiaries derive future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be realised; ▪ the parent and the subsidiaries continue to comply with the conditions for deductibility imposed by the law; and ▪ no changes in tax legislation adversely affect the Parent and the Subsidiaries in realising the benefit from the deductions for the losses, i.e. current tax legislation permits carried forward tax losses to be carried forward indefinitely. No franking credits are available for subsequent years. Tax consolidation The tax consolidation scheme applies to the Company. As at the date of this report the Directors have assessed the financial effect the scheme may have on the Company and its consolidated entities and have decided to be taxed as a consolidated entity. The financial effect of the tax consolidation scheme on the Group has not been recognised in the financial statements. 90 EQ Resources Limited Annual Report 2025
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