Page 112 - Suncor AR English

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Dec 31 Dec 31 Jan 1
($ millions)
2013
2012
2012

(restated –
(restated –
note 6)
note 6)
103
141
6
Current deferred income tax liability
.......................................................................................................................................................................................................................................................
Current deferred income tax asset (4) (9) (13)
.......................................................................................................................................................................................................................................................
Non-current deferred income tax liability 10 681 10 303 9 696 .......................................................................................................................................................................................................................................................

Non-current deferred income tax asset (61) (69) (47)
Net deferred income tax liability
10 719 10 366
9 642

Change in Deferred Income Tax Balances

($ millions)
2013
2012
(restated –

note 6)

10 366
9 642
Beginning of year
.......................................................................................................................................................................................................................................................

Recognized in deferred income tax expense 382 729 .......................................................................................................................................................................................................................................................

Recognized in other comprehensive income 201 (49) .......................................................................................................................................................................................................................................................

Foreign exchange, disposition, and other (230) 44
End of year 10 719 10 366

No deferred tax liability has been recognized at December 31, 2013 on temporary differences of approximately
$11.2 billion (2012 – $9.9 billion) associated with earnings retained in our investments in foreign subsidiaries, as the

company is able to control the timing of the reversal of these differences. Based on current plans, repatriation of funds in
excess of foreign reinvestment will not result in material additional income tax expense. Deferred distribution taxes

associated with international business operations have not been recorded.

Canada Revenue Agency Proposal Letter
In January 2013, the company received a proposal letter from the Canada Revenue Agency (CRA) relating to the income

tax treatment of the realized losses in 2007 on the settlement of certain derivative contracts. Following the company’s
response to the letter and subsequent information requests in 2013, CRA informed the company that it has not changed

its original proposed position.

In the event that the CRA issues a formal Notice of Reassessment (NOR), the company plans to file a Notice of Objection
to dispute this matter. However, notwithstanding the filing of an objection, the company would be required to make a

minimum payment of 50% of the amount payable under the NOR, estimated to be $600 million, which would remain on
account until the dispute is resolved.

The company strongly disagrees with the CRA’s position and firmly believes it will be able to successfully defend its

original filing position so that, ultimately, no increased income tax payable will result from the CRA’s actions. If the
company is unsuccessful in defending its tax filing position, it could be subject to an earnings impact of up to

$1.2 billion.

108 SUNCOR ENERGY INC. ANNUAL REPORT 2013