Tax charge (Tables)

12 Months Ended

Dec. 31, 2023

Tax charge

Schedule of total tax charge in the income statment

	IFRS 17 basis		IFRS 4 basis
	2023 $m	2022 $m	2021 $m
Hong Kong	(129)	(106)	(119)
Indonesia	(43)	(27)	(70)
Malaysia	(98)	(44)	(73)
Singapore	(174)	(61)	(328)
Growth markets and other	(103)	(210)	(163)
Eastspring	(26)	(26)	(30)
Total segment note (i)	(573)	(474)	(783)
Unallocated to a segment (central operations)	13	(4)	(21)
Total tax charge notes (i)(ii)	(560)	(478)	(804)

Notes

(i) Profit before tax includes Prudential’s share of profit after tax from the joint ventures and associates that are equity-accounted for. Therefore, the actual tax charge in the income statement does not include tax arising from the results of joint ventures and associates including CPL.

(ii) The total tax charge is analysed between current tax and deferred tax as follows

Schedule of total tax charge

	IFRS 17 basis		IFRS 4 basis
	2023 $m	2022 $m	2021 $m
Current tax expense:
Corporation tax	(457)	(474)	(405)
Adjustments in respect of prior years	1	(7)	6
Total current tax charge	(456)	(481)	(399)
Deferred tax arising from:
Origination and reversal of temporary differences	(135)	—	(388)
Adjustment in respect of a tax loss, tax credit or temporary difference from a prior year	31	3	(17)
Total deferred tax (charge) credit	(104)	3	(405)
Total tax charge	(560)	(478)	(804)

Schedule of shareholder profit and tax charge

	IFRS 17 basis								IFRS 4 basis
	2023				2022				2021
	$m			%	$m			%	$m			%
Profit (loss) before tax (being tax attributable to shareholders’ and policyholders’ returns)	2,272				(519)				3,018
Tax charge attributable to policyholders’ returns note (i)	(175)				(124)				(342)
Profit (loss) before tax attributable to shareholders’ returns	2,097				(643)				2,676
Tax (charge) credit at the expected rate	(399)		19	%	85		13	%	(539)		20	%
Effects of recurring tax reconciliation items:
Income not taxable or taxable at concessionary rates note (ii)	80		(4)	%	61		9	%	63		(2)	%
Deductions and losses not allowable for tax purposes note (iii)	(136)		6	%	(196)		(30)	%	(92)		3	%
Items related to taxation of life insurance businesses note (iv)	137		(7)	%	(129)		(20)	%	177		(7)	%
Deferred tax adjustments including unrecognised tax losses	13		(1)	%	(45)		(7)	%	(111)		4	%
Effect of results of joint ventures and associates note (v)	(38)		2	%	(32)		(5)	%	80		(3)	%
Irrecoverable withholding taxes note (vi)	(63)		3	%	(55)		(9)	%	(60)		2	%
Other	(2)		1	%	(15)		(2)	%	(8)		1	%
Total (charge) credit on recurring items	(9)		0	%	(411)		(64)	%	49		(2)	%
Effects of non-recurring tax reconciliation items:
Adjustments to tax charge in relation to prior years note(vii)	42		(2)	%	1		0	%	(11)		0	%
Movements in provisions for open tax matters note (viii)	(15)		1	%	(40)		(6)	%	47		(2)	%
Impact of changes in local statutory tax rates	—		0	%	—		0	%	6		0	%
Adjustments in relation to business disposals and corporate transactions	(4)		0	%	11		2	%	(14)		1	%
Total credit (charge) on non-recurring items	23		(1)	%	(28)		(4)	%	28		(1)	%
Tax charge attributable to shareholders’ returns	(385)				(354)				(462)
Tax charge attributable to policyholders’ returns note (i)	(175)				(124)				(342)
Tax charge attributable to shareholders’ and policyholders’ returns	(560)				(478)				(804)
Profit before tax attributable to shareholders’ returns analysed into:
Adjusted operating profit	2,893				2,722				3,233
Non-operating result note (ix)	(796)				(3,365)				(557)
Profit (loss) before tax attributable to shareholders’ returns	2,097				(643)				2,676
Tax charge attributable to shareholders' returns analysed into:
Tax charge on adjusted operating profit	(444)				(539)				(548)
Tax credit on non-operating result note (ix)	59				185				86
Tax charge attributable to shareholders’ returns	(385)				(354)				(462)
Actual tax rate on:
Adjusted operating profit:
Including non-recurring tax reconciling items note(x)	15	%			20	%			17	%
Excluding non-recurring tax reconciling items	16	%			18	%			18	%
Profit before tax attributable to shareholders’ returns note (x)	18	%			(55)	%			17	%

Notes

(i) The tax charge attributable to policyholders of $(175) million (2022: $(124) million on an IFRS 17 basis; 2021: $(342) million on an IFRS 4 basis) is equal to the profit before tax attributable to policyholders as a result of accounting for policyholder income after the deduction of expenses on a post-tax basis.

(ii) Income not taxable or taxable at concessionary rates primarily relates to non-taxable investment income in Growth markets and Singapore.

(iii) Deductions and losses not allowable for tax purposes primarily relates to non-deductible head office costs in Other operations.

(iv) Items related to taxation of life insurance businesses primarily relates to Hong Kong where the taxable profit is computed as 5 per cent of net insurance premiums.

(v) Profit before tax includes Prudential’s share of profit after tax from the joint ventures and associates. Therefore, the actual tax charge does not include tax arising from profit or loss of joint ventures and associates and is reflected as a reconciling item.

(vi) The Group incurs withholding tax on remittances received from certain jurisdictions and on certain investment income. Where these withholding taxes cannot be offset against corporate income tax or otherwise recovered, they represent a cost to the Group. Irrecoverable withholding tax on remittances is included in Other operations and is not allocated to any segment. Irrecoverable withholding tax on investment income is included in the relevant segment where the investment income is reflected.

(vii) Adjustments to tax charge in relation to prior years primarily relates to the recognition of a deferred tax asset in relation to historical tax losses, due to an increase in forecast taxable profit in the UK tax group.

(viii) The statement of financial position contains the following provisions in relation to open tax matters.

	2023 $m
Balance at 1 Jan	(79)
Movements in the current year included in tax charge attributable to shareholders	(15)
Other movements (including interest arising on open tax matters and amounts included in the Group’s share of profits from joint ventures and associates, net of related tax)	1
Balance at 31 Dec	(93)

(ix) ‘Non-operating result’ is used to refer to items excluded from adjusted operating profit and includes short-term investment fluctuations in investment returns and corporate transactions. The tax charge on non-operating result is calculated using the tax rates applicable to investment profit or loss recorded in the non-operating result for each entity, and then adjusting for any discrete items included in the total tax charge that relate specifically to the amounts (other than investment related profit or loss) included in the non-operating result. The difference between this tax on non-operating result and the tax charge calculated on profit before tax is the tax charge on adjusted operating profit.

(x) The actual tax rates of the relevant business operations are shown below:

	IFRS 17 basis
	2023 %
									Growth						Total
	Hong								markets				Other		attributable to
	Kong		Indonesia		Malaysia		Singapore		and other		Eastspring		operations		shareholders
Tax rate on adjusted operating profit	7	%	22	%	22	%	16	%	20	%	9	%	2	%	15	%
Tax rate on profit before tax	7	%	22	%	20	%	16	%	11	%	9	%	2	%	18	%

	IFRS 17 basis
	2022 %
									Growth						Total
	Hong								markets				Other		attributable to
	Kong		Indonesia		Malaysia		Singapore		and other		Eastspring		operations		shareholders
Tax rate on adjusted operating profit	4	%	19	%	26	%	16	%	33	%	10	%	0	%	20	%
Tax rate on profit before tax	(7)	%	16	%	25	%	63	%	40	%	10	%	(1)	%	(55)	%

	IFRS 4 basis
	2021 %
									Growth						Total
	Hong								markets				Other		attributable to
	Kong		Indonesia		Malaysia		Singapore		and other		Eastspring		operations		shareholders
Tax rate on adjusted operating profit	5	%	17	%	21	%	15	%	22	%	10	%	(3)	%	17	%
Tax rate on profit before tax	4	%	17	%	21	%	15	%	27	%	10	%	(2)	%	17	%

Schedule of movements in provisions for open tax matters

	2023 $m
Balance at 1 Jan	(79)
Movements in the current year included in tax charge attributable to shareholders	(15)
Other movements (including interest arising on open tax matters and amounts included in the Group’s share of profits from joint ventures and associates, net of related tax)	1
Balance at 31 Dec	(93)

Schedule of tax rate of relevant business operations

	IFRS 17 basis
	2023 %
									Growth						Total
	Hong								markets				Other		attributable to
	Kong		Indonesia		Malaysia		Singapore		and other		Eastspring		operations		shareholders
Tax rate on adjusted operating profit	7	%	22	%	22	%	16	%	20	%	9	%	2	%	15	%
Tax rate on profit before tax	7	%	22	%	20	%	16	%	11	%	9	%	2	%	18	%

	IFRS 17 basis
	2022 %
									Growth						Total
	Hong								markets				Other		attributable to
	Kong		Indonesia		Malaysia		Singapore		and other		Eastspring		operations		shareholders
Tax rate on adjusted operating profit	4	%	19	%	26	%	16	%	33	%	10	%	0	%	20	%
Tax rate on profit before tax	(7)	%	16	%	25	%	63	%	40	%	10	%	(1)	%	(55)	%

	IFRS 4 basis
	2021 %
									Growth						Total
	Hong								markets				Other		attributable to
	Kong		Indonesia		Malaysia		Singapore		and other		Eastspring		operations		shareholders
Tax rate on adjusted operating profit	5	%	17	%	21	%	15	%	22	%	10	%	(3)	%	17	%
Tax rate on profit before tax	4	%	17	%	21	%	15	%	27	%	10	%	(2)	%	17	%