INCOME TAX (CREDIT)/EXPENSE (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Creditexpense Schedule Of Overseas Tax Jurisdictions Details

The charge for tax based on the profit comprises:

	December 31, 2017 US$‘000			December 31, 2016 US$‘000			December 31, 2015 US$‘000
Current tax expense
Irish Corporation tax		(51	)		(240	)		(251	)
Foreign taxes (a)		358			222			472
Adjustment in respect of prior years		150			(271	)		82

Total current tax (credit)/expense		457			(289	)		303

Deferred tax expense (b)
Origination and reversal of temporary differences (see Note 14)		(5,969	)		(2,872	)		2,411
Origination and reversal of net operating losses (see Note 14)		4,298			(396	)		(1,958	)

Total deferred tax (credit)/expense		(1,671	)		(3,268	)		453

Total income tax (credit)/charge on continuing operations in statement of operations		(1,214	)		(3,557	)		756

(a)

The foreign taxes relate primarily to USA and Canada.

(b)

In 2017, there was a deferred tax credit of US$170,000 (2016: credit of US$1,804,000; 2015: charge of US$1,246,000) recognised in respect of Ireland and a deferred tax credit of US$1,501,000 (2016: US$1,464,000 credit; 2015: US$793,000 credit) recognised in respect of overseas tax jurisdictions.

Effective tax rate	December 31, 2017 US$‘000			December 31, 2016 US$‘000			December 31, 2015 US$‘000
Profit/(Loss) before taxation		(39,875	)		(42,140	)		22,943
As a percentage of profit/loss before tax:
Current tax		1.14	%		(0.69	)%		1.32	%
Total (current and deferred)		(3.05	)%		(8.44	)%		3.30	%

Schedule of Overseas Tax Jurisdictions

Effective tax rate	December 31, 2017 US$‘000			December 31, 2016 US$‘000			December 31, 2015 US$‘000
Profit/(Loss) before taxation		(39,875	)		(42,140	)		22,943
As a percentage of profit/loss before tax:
Current tax		1.14	%		(0.69	)%		1.32	%
Total (current and deferred)		(3.05	)%		(8.44	)%		3.30	%

Schedule of Statutory Tax Rate

The following table reconciles the applicable Republic of Ireland statutory tax rate to the effective total tax rate for the Group:

	December 31, 2017			December 31, 2016			December 31, 2015
Irish corporation tax		(12.5	)%		(12.5	)%		12.5	%
Effect of current year net operating losses and temporary differences for which no deferred tax asset was recognised (a)		12.05	%		6.22	%		(1.94	)%
Effect of changes in US tax code (b)		(1.89	)%		-			-
Effect of tax rates on overseas earnings		(2.09	)%		(1.39	)%		(1.34	)%
Effect of Irish income taxable at higher tax rate		-			0.05	%		0.06	%
Adjustments in respect of prior years		0.38	%		(0.64	)%		2.53	%
R&D tax credits (c)		(0.17	)%		(0.65	)%		(3.98	)%
Other items (d)		1.17	%		0.47	%		(4.53	)%

Effective tax rate		(3.05	)%		(8.44	)%		3.30	%

(a)

The effect of current year net operating losses and temporary differences for which no deferred tax asset was recognized is analyzed further in the table below (see also Note 14). No deferred tax asset was recognized because there was no reversing deferred tax liability in the same jurisdiction reversing in the same period and no future taxable income in the same jurisdiction.

(b)

In 2017, a number of changes were made to the USA tax code, the most significant of which was the reduction in the federal corporation tax rate to 21%. This resulted in a once-off tax credit of US$753,000 arising from the reduction in deferred tax balances due to the tax rate change, partially offset by the effect of mandatory deemed repatriation of certain deferred foreign earnings.

(c)

A lower amount of R&D tax credits has been recorded in 2017 compared to prior years because several of the R&D projects in Ireland are at an advanced stage where they no longer qualify for such a tax credit.

(d)

Other items comprise items not chargeable to tax/expenses not deductible for tax. In 2017, other items mainly comprise the movement in the Loan Note’s embedded derivatives value and the accretion of notional interest on the Loan Note’s host contract, both of which are exempt from deferred taxation recognition under IAS 12, Income Taxes.

Schedule of Unrecognised Deferred Tax Assets

Unrecognised deferred tax assets – continuing operations	Effect in 2017 US$’000			Percentage effect in 2017			Effect in 2016 US$’000		Percentage effect in 2016
Temporary differences arising in the US		68			0.17	%		2		0.01	%
(Decrease)/increase in net operating losses arising in Brazil		(714	)		(1.79	)%		1,670		3.96	%
Net operating losses arising in Ireland		5,452			13.67	%		947		2.25	%

		4,806			12.05	%		2,619		6.22	%

Schedule of (Loss)/Profit Before Taxes

The distribution of (loss) / profit before taxes by geographical area was as follows:

	December 31, 2017 US$‘000			December 31, 2016 US$‘000			December 31, 2015 US$‘000
Rest of World – Ireland		(35,821	)		(23,787	)		18,232
Rest of World – Other		4,809			5,241			5,378
Americas		(8,863	)		(23,594	)		(667	)

		(39,875	)		(42,140	)		22,943

Schedule of Unutilised Net Operating Losses

At December 31, 2017, the Group had unutilised net operating losses as follows:

	December 31, 2017 US$‘000		December 31, 2016 US$‘000		December 31, 2015 US$‘000
USA		7,737		8,896		11,026
Ireland		57,206		40,652		22,609
Brazil		4,060		6,159		1,245

		69,003		55,707		34,880

Schedule of Unused Tax Losses and Unused Tax Credits

At December 31, 2017, the Group had unrecognised deferred tax assets in respect of unused tax losses and unused tax credits as follows:

	December 31, 2017 US$‘000		December 31, 2016 US$‘000		December 31, 2015 US$‘000
US – unused tax credits		345		277		275
Brazil – unused tax losses		1,380		2,094		423
Ireland – unused tax losses		8,471		3,019		724

Unrecognised deferred tax asset		10,196		5,390		1,422