Annual Report 2016 - page 158

New World Development Company Limited
144
Financial Section
11 Taxation
2016
2015
HK$m
HK$m
Current taxation
Hong Kong profits tax
925.3
623.9
Mainland China and overseas taxation
3,301.4
1,706.6
Mainland China land appreciation tax
2,093.7
1,667.6
Deferred taxation (note 27)
Valuation of investment properties
60.5
178.5
Other temporary differences
42.8
87.8
6,423.7
4,264.4
Hong Kong profits tax has been provided at the rate of 16.5% (2015: 16.5%) on the estimated assessable profit for the year.
Taxation on Mainland China and overseas profits has been calculated on the estimated taxable profit for the year at the
rates of taxation prevailing in the countries in which the Group operates. These rates range from 12% to 25% (2015: 9% to
25%).
Mainland China land appreciation tax is provided at progressive rates ranging from 30% to 60% (2015: 30% to 60%) on the
appreciation of land value, being the proceeds of sale of properties less deductible expenditures including costs of land use
rights and property development expenditures.
Share of results of joint ventures and associated companies is stated after deducting the share of taxation of joint ventures
and associated companies of HK$646.0 million and HK$254.2 million (2015: HK$1,085.8 million and HK$191.7 million)
respectively.
The taxation on the Group’s profit before taxation differs from the theoretical amount that would arise using the taxation
rate of Hong Kong as follows:
2016
2015
HK$m
HK$m
Profit before taxation and share of results of joint ventures
and associated companies
16,046.6
27,479.2
Calculated at a taxation rate of 16.5% (2015: 16.5%)
2,647.7
4,534.1
Effect of different taxation rates in other countries
1,205.5
644.9
Income not subject to taxation
(1,505.5)
(3,390.1)
Expenses not deductible for taxation purposes
1,938.4
627.7
Tax losses not recognised
514.7
589.1
Temporary differences not recognised
7.7
59.8
Utilisation of previously unrecognised tax losses
(234.0)
(101.9)
Deferred taxation on undistributed profits
262.0
153.2
Recognition of previously unrecognised temporary differences
5.2
Under/(over) provision in prior years
10.6
(71.7)
Land appreciation tax deductible for calculation of income tax purposes
(523.4)
(416.9)
Others
6.3
(36.6)
4,330.0
2,596.8
Mainland China land appreciation tax
2,093.7
1,667.6
Taxation charge
6,423.7
4,264.4
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