SA rand   US dollar
20092010Figures in million20102009



   SA normal taxation  
   Mining tax (a)  
13044 – current year614
41(1) – prior year5
   Non-mining tax (b)  
15940 – current year518
51 – prior year1
   Deferred tax (c)  
358364 – deferred tax4840
   Foreign normal taxation  
(505)(113) – deferred tax (d)(15)(56)
188335 Total normal taxation4422
    (a)Mining tax on gold mining income in South Africa is determined according to a formula, based on the taxable income from mining operations. Gold mining companies within the group that have elected to be exempt from Secondary Tax on Companies (STC) are taxed at higher rates than those that have not made the election.  
     All qualifying mining capital expenditure is deducted from taxable mining income to the extent that it does not result in an assessed loss. Accounting depreciation is eliminated when calculating the South African mining tax income. Excess capital expenditure is carried forward as unredeemed capital to be claimed from future mining taxable income. The group has several tax paying entities in South Africa. In terms of the mining ring-fencing application, each ring-fenced mine is treated separately and deductions can normally only be utilised against mining income generated from the relevant ring-fenced mine.  
     The formulas for determining the South African gold mining tax rates for the 2009 and 2010 financial years are:  
     Y = 43 – 215/X (entities whom elected not to pay STC)  
     Y = 34 – 170/X (entities whom did not make the election)  
     Where Y is the percentage rate of tax payable and X is the ratio of taxable income, net of any qualifying capital expenditure that bears to mining income so derived, expressed as a percentage.  
    (b)Non-mining income is taxed at 35% (exempt from STC) and 28% (no election made). Non-mining companies are taxed at the statutory corporate rate of 28%.  
    (c)The deferred tax rate used to calculate deferred tax is based on the current estimate of future profitability when temporary differences will reverse, based on tax rates and tax laws that have been enacted at balance sheet date. Depending on the profitability of the operations, the deferred tax rate can consequently be significantly different from year to year. The deferred tax rates of the group’s mining companies are as follows:  
     Harmony Gold Mining Company Limited23.1%17.1%
     Randfontein Estates Limited20.9%20.2%
     Evander Gold Mines Limited22.9%6.9%
     ARMGold/Harmony Freegold Joint Venture  
     Company (Proprietary) Limited29.4%28.8%
     Avgold Limited0.0%0.0%
     Kalahari Goldridge Mining Company Limited21.0%24.0%
    (d) Mining and non-mining income of Australian and PNG operations is taxed at a standard tax rate of 30%.  
   Income and mining tax rates  
   The tax rates remained unchanged for the 2010 and 2009 financial years.  
   Major items causing the group’s income tax provision to differ from the maximum mining statutory tax rate of 43% (2009: 43%) were:  
(900)(75) Tax on net profit from continuing operations at the maximum mining statutory tax rate(10)(102)
(305)(144) Non-allowable deductions(19)(33)
524 Profit from associates31
12616 Difference between effective mining tax rate and statutory mining rate on mining income214
10022 Difference between non-mining tax rate and statutory mining rate on non-mining income311
479(726) Effect on temporary differences due to changes in effective tax rates(95)53
(45) Prior year adjustment – mining and non-mining tax(5)
352548 Capital allowance, sale of business and other rate differences7239
(188)(335) Income and mining taxation(44)(22)
9%191% Effective income and mining tax rate183%9%
   Deferred tax  
   Deferred tax liabilities and assets on the balance sheet as at 30 June 2010 and 30 June 2009 relate to the following:  
4 9635 422 Gross deferred tax liability711643
4 7865 406 Amortisation and depreciation709620
92 Product inventory not taxed12
8516 Other211
(1 712)(1 887) Gross deferred tax asset(248)(222)
(1 409)(1 506) Unredeemed capital expenditure(198)(183)
(231)(269) Provisions, including non-current provisions(35)(30)
(72)(112) Tax losses(15)(9)
(1) Disposal groups classified as held for sale
3 2513 534 Net deferred tax liability463421
SA rand       US dollar
20092010Figures in million20102009
   Movement in the net deferred tax liability recognised in the balance sheet is as follows:  
2 9903 251 Balance at beginning of year421383
258251 Total charge per income statement3329
132 Foreign currency translation99
2 Tax directly charged to equity
3 2513 534 Balance at end of year463421
   The following amounts that are expected to realise or be recovered in the next 12 months have been included in the deferred tax liabilities and assets:  
113284 Deferred tax liabilities3715
(94)(187) Deferred tax assets(25)(12)
1997 Net current deferred tax liability123
   As at 30 June, certain subsidiaries in the group had the following tax credits:  
12 24513 604 Unredeemed capital expenditure available for utilisation against future mining taxable income1 7831 586
190394 Tax losses carried forward utilisable against taxable income5225
571469 Capital Gains Tax (CGT) losses available to be utilised against future CGT gains.6174
2 9272 947 As at 30 June, the group had not recognised the following deferred tax asset amounts386379
   The unrecognised temporary differences are:  
7 1558 165 Unredeemed capital expenditure1 070926
207114 Tax losses1527
571469 CGT losses6174
1 1901 190 Temporary differences relating to investments in associates156154
   Secondary Taxation on Companies  
   STC is a tax levied on South African companies at a rate of 10% with effect from 1 October 2007 on dividends distributed.  
    Current and deferred tax is measured at the tax rate applicable to undistributed income and therefore only takes STC into account to the extent that dividends have been received or paid.  
   On declaration of a dividend, the company includes the STC on this dividend in its computation of the income tax expense in the period of such declaration.  
278141 Available STC credits at end of year1835
   On 13 August 2010, the board of directors approved a final dividend for the 2010 financial year of 50 SA cents per share. The total dividend amounts to R214 million (US$29.3 million: calculated using the exchange rate on declaration date). As the dividends declared exceed the STC credits available, STC on the amount of R73 million is payable at a rate of 10%.