Benitec Biopharma Inc.BNTC
Benitec Biopharma Inc. Income Taxes Disclosure
1
1
. Income taxes Loss before provision for incom
e taxes consisted of the following:
(US$’000) |
Year Ended June 30, |
|||||||
2025 |
2024 |
|||||||
United States |
$ | (37,183 | ) | $ | (21,036 | ) | ||
International |
(734 | ) | (715 | ) | ||||
Total |
$ | (37,917 | ) | $ | (21,751 | ) | ||
The tax effects of significant items comprising the Company’s deferred taxes are as follows:
(US$’000) |
June 30, |
|||||||
2025 |
2024 |
|||||||
Deferred tax assets: |
||||||||
Net operating losses |
$ |
16,473 |
$ |
14,466 |
||||
Other |
110 |
172 |
||||||
Lease liability |
178 |
60 |
||||||
Share-based compensation |
470 |
264 |
||||||
Intangible assets |
200 |
218 |
||||||
Section 174 Capitalization |
8,103 |
5,771 |
||||||
Gross deferred tax assets |
25,534 |
20,951 |
||||||
Less valuation allowance |
(25,044 |
) |
(20,594 |
) | ||||
Deferred tax liabilities: |
||||||||
Right-of-use |
(181 |
) |
(57 |
) | ||||
Fixed assets |
(5 |
) |
(5 |
) | ||||
Prepaid expenses |
(123 |
) |
(99 |
) | ||||
Unrealized foreign exchange gains and losses |
(181 |
) |
(196 |
) | ||||
Total deferred tax liabilities |
(490 |
) |
(357 |
) | ||||
Net deferred taxes |
$ |
— |
$ |
— |
||||
ASC
740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. Because of the Company’s recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance. As of June
30,
2025 and
2024, the Company established a valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such assets.
The valuation allowance
increased
$4.45 million during the year ended June 30, 2025. Net operating losses and tax credit carryforwards as of June 30, 2025 are as follows: (US$’000) |
Amount |
Expiration Years |
||||||
| Net operating losses, federal (post-December 31, 2017) |
$ | 21,391 | Do not expire | |||||
| Net operating losses, state |
— | — | ||||||
| Net operating losses, Australia |
47,924 | Do not expire | ||||||
The effective rate of the Company’s provision (benefit) for income taxes differs from the federal statutory rate as follows:
Year Ended June 30, |
||||||||
2025 |
2024 |
|||||||
| Statutory rate |
21.00 |
% |
21.00 |
% | ||||
| Permanent differences |
(0.09 |
%) | (0.76 |
%) | ||||
| Share-based payments |
(0.53 |
%) |
(0.80 |
%) | ||||
| Change in valuation allowance |
(11.82 |
%) | 7.12 |
% | ||||
| Foreign tax rate differential |
0.02 |
% |
0.03 |
% | ||||
| Section 382 Write-off |
(0.00 |
%) |
(26.59 |
%) | ||||
| Section 162m Write-off |
|
|
(8.58 |
%) |
|
|
0.00 |
% |
| |
|
|
|
|||||
| Total |
(0.00 |
%) |
(0.00 |
%) | ||||
| |
|
|
|
|||||
The Company is subject to taxation in the U.S., various state jurisdictions and Australia. The Company’s tax returns for the tax years 2019 through 2023 are open and are subject to examination by federal taxing authorities and the Company’s tax returns for tax years 2020 through 2023 are subject to examination by state taxing authorities. The Company is not currently undergoing a tax audit in any federal, state, or Australian jurisdiction.
The entire amount of the Company’s unrecognized tax benefits would not impact its effective tax rate if recognized. The Company has elected to include interest and penalties as a component of tax expense. During the year ended June
30,
2025, the Company did not recognize accrued interest and penalties related to unrecognized tax benefits. The Company does not anticipate that the amount of existing unrecognized tax benefits will significantly increase or decrease during the next
12 months.
Internal Revenue Code Section 382 places a limitation (“Section 382 Limitation”) on the amount of taxable income that can be offset by NOL carryforwards after a change in control (generally greater than 50% change in ownership within a three-year period) of a loss corporation. California has similar rules. Generally, after a change in control, a loss corporation cannot deduct NOL carryforwards in excess of the Section 382 Limitation. Due to these “change in ownership” provisions, utilization of the NOL and tax credit carryforwards may be subject to an annual limitation regarding their utilization against taxable income in future periods.
Under Australian income tax legislation, losses can be utilized by the Company if it satisfies firstly the Continuity of Ownership Test (“COT”) or if failing that, the Similar Business Test (“SBT”). Broadly, the COT requires a company to show that it maintained continuity of majority beneficial ownership from the beginning of the year in which a loss is incurred to the end of an income year in which a tax loss is sought to be recouped. The SBT requires a company to demonstrate that a “similar business” has been maintained from the time when the COT is failed and throughout the period until the end of the income year that the losses are being recouped.
On June 27, 2024, California’s Governor signed Senate Bill 167 (SB 167), which limits the use of net operating losses and business credits for tax years beginning on January 1, 2024, and before January 1, 2027. The legislation disallows a net operating loss deduction for medium and large businesses and limits the use of tax credits to offset tax due to no more than $5 million for each taxable year. The Company evaluated the impact of SB 167 and determined that the legislation did not materially impact the Company’s income tax provision for the fiscal year ended June 30,
2025.
In July 2025, the U.S. government enacted comprehensive legislation commonly referred to as the One Big Beautiful Bill Act of 2025 (the “OBBB”). The OBBB, which includes a broad range of tax reform provisions, including extending and modifying certain key Tax Cuts and Jobs Act provisions (both domestic and international). It includes reinstating the option to claim 100% accelerated deprecations deductions on qualified property and immediate expensing of domestic research and development costs. Income tax accounting guidance requires the effects of tax law changes to be recognized in the period of enactment. Since the legislation was signed into law after June 30, 2025, it had no impact on our operating results for the fiscal year ended June 30, 2025. The provisions of the OBBB are currently not expected to have a material effect on the Company’s financial statements and related disclosures; however, the Company will continue to monitor developments and evaluate any potential future impacts.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Sep 22, 2025 | Showing above |
| 2024 | Sep 26, 2024 | |
| 2023 | Sep 21, 2023 | |
| 2022 | Sep 2, 2022 | |
| 2021 | Sep 20, 2021 | |
| 2020 | Sep 23, 2020 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.