Notes to the Financial Statements For the financial year ended 31 December 2025 23. BORROWING COSTS, NET Group 2025 2024 $’000 $’000 Finance income: – interest income from bank deposits 528 979 – financial derivatives – 8,321 Finance costs paid and payable: – bank loans (62,699) (69,065) – financial derivatives (6,422) – – fixed rate notes (6,668) (3,259) – loan from non-controlling interests (2,873) (643) Amortisation of transaction costs relating to debt facilities (6,785) (5,218) (84,919) (68,885) 24. INCOME TAX EXPENSE A reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporate tax rate for the financial years ended 31 December 2025 and 2024 is as follows: Group 2025 2024 $’000 $’000 Current income tax – Current year 3,018 498 – (Over)/Under provision in prior years (409) 42 Deferred tax 2,772 4,272 Withholding tax – Current year 2,228 5,096 – Under provision in prior years 209 48 7,818 9,956 Reconciliation of tax expense Total return/(loss) for the year before income tax 61,548 (97,658) Income tax using Singapore tax rate of 17% (2024: 17%) 10,463 (16,602) Effect of different tax rates in foreign jurisdictions (388) (345) Income not subject to tax (12,832) (11,016) Non-tax deductible items 34,382 59,277 Deferred tax on fair value gain on investment properties and investments at FVTPL 2,772 4,272 Tax transparency (26,374) (25,726) (Over)/Under provision of tax in prior years (200) 90 Others (5) 6 Income tax expense 7,818 9,956 197 ESR-REIT ANNUAL REPORT 2025
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