Annual report pursuant to Section 13 and 15(d)

DEFERRED TAX (LIABILITIES)/ASSETS

v3.23.1
DEFERRED TAX (LIABILITIES)/ASSETS
 12 Months Ended
Mar. 31, 2022
Income Tax Disclosure [Abstract]  
DEFERRED TAX (LIABILITIES)/ASSETS DEFERRED TAX (LIABILITIES)/ASSETS
The Company is subject to taxation in Russia, Kazakhstan, Kyrgyzstan, Cyprus, Ukraine, Uzbekistan, Germany and the United States of America.
The tax rates used for deferred tax assets and liabilities for the years ended March 31, 2022 and 2021, were 21% for the U.S., 20% for Russia, Kazakhstan, Azerbaijan, 10% for Kyrgyzstan, 31% for Germany, 12.5% for Cyprus, 18% for Ukraine, 25% for United Kingdom, 18% for Armenia and 15% for Uzbekistan. This note is presented excluding the discontinued operations, which is presented separately in Note 26 "Assets and Liabilities Held for Sale".
As of March 31, 2022 and 2021, deferred tax assets and liabilities of the Company were comprised of the following:
March 31, 2022 March 31, 2021
(recast) (recast)
Deferred tax assets:
Revaluation on trading securities $ —  $ — 
Tax losses carryforward 679  316 
Accrued liabilities 776  109 
Depreciation —  16 
Stock compensation expenses —  — 
Valuation allowance —  (316)
Deferred tax assets $ 1,455  $ 125 
Deferred tax liabilities:
Revaluation on trading securities $ 210  $ 2,041 
Fixed and Intangible Assets —  1,568 
Subordinated debt —  523 
Other liabilities 388  — 
Deferred tax liabilities $ 598  $ 4,132 
Net deferred tax (liabilities)/assets $ 857  $ (4,007)
The Company is subject to the U.S. federal income taxes at a rate of 21%. The reconciliation of the provision for income taxes at the 21% tax rate compared to the Company's income tax expense as reported is as follows:
 
Year ended
March 31, 2022
Year ended
March 31, 2021
 Year ended March 31, 2020
  (recast) (recast) (recast)
Profit before tax at 21%
 $ 74,359  $ 30,346  $ 6,109 
Global intangible low taxed income 31,194  18,451  4,803 
Stock based compensation 3,090  348  551 
Losses carried forward adjustment —  —  — 
Other differences —  —  20 
Provision for impairment losses (75) 128  (245)
Valuation allowance (316) (361) 416 
Non-taxable interest income (659) —  — 
Permanent differences (5,165) (2,209) (605)
Foreign tax credit (16,200) (10,155) (3,503)
Foreign tax rate differential (18,448) (9,418) (2,884)
Nontaxable gains (29,251) (3,768) 271 
Income tax provision $ 38,529  $ 23,362  $ 4,933 
As of March 31, 2022 and 2021, income tax expense was comprised of the following:
 
Year ended
March 31, 2022
Year ended
March 31, 2021
 Year ended March 31, 2020
(recast) (recast) (recast)
Current income tax charge $ 42,525  $ 21,811  $ 4,753 
Deferred income tax charge (3,996) 1,551  180 
Income tax provision $ 38,529  $ 23,362  $ 4,933 
During the years ended March 31, 2022, 2021 and 2020, the Company realized net income before income tax of $354,093, $144,503 and $29,091, respectively. During the same periods, the Company's effective tax rate was equal to 10.9%, 16.2% and 17.0%, respectively. This decrease in income tax expense was primarily attributable to non-taxable gains on trading securities in Freedom KZ, Freedom Bank KZ, Freedom EU and Freedom Technologies.
Tax loss carryforwards as of March 31, 2022, was $679 in Cyprus.