Annual Report 2019

China Merchants China Direct Investments Limited Annual Report 2019 111 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2019 12. TAXATION (CONTINUED) The tax (charge) credit for the year can be reconciled to the profit (loss) before taxation per the consolidated statement of profit or loss and other comprehensive income as follows: 2019 2018 US$ US$ Profit (loss) profit before taxation 136,355,337 (105,266,617) Tax at the domestic income tax rate of 25% (2018: 25%) (Note) (34,088,834) 26,316,654 Tax effect of expenses not deductible for tax purpose (3,008,057) (3,878,956) Tax effect of income not taxable for tax purpose 4,139,664 4,214,013 Underprovision in prior year — (47,589) Tax effect of tax losses/deductible temporary differences not recognised (94,448) (586,634) Utilisation of tax losses previously not recognised 706,743 — Utilisation of deductible temporary difference previously not recognised 67,647 — Effect of different tax rates of the Company and its subsidiaries operating in other regions in the PRC 1,908,101 (3,230,485) Withholding tax for undistributed earnings of PRC subsidiaries (3,845,576) 4,804,954 Withholding tax for distributed earnings (985,578) (364,262) Effect of different tax rates applied for deferred tax liability recoginised for the year 738,475 (9,709,495) Others (84,500) 727,292 Taxation (34,546,363) 18,245,492 Note: The domestic tax rate (which is PRC Enterprise Income Tax rate applicable to the Company’s major subsidiaries in the PRC) represents the tax rate in the jurisdiction where the investments of the Group are substantially located. 13. DIVIDENDS Subsequent to the end of the reporting period, a final dividend of US$0.07 per share (2018: a final dividend of US$0.07 per share and special dividends of US$0.10 per share), totaling US$0.07 per share (2018: US$0.17), in an aggregate amount of US$10,663,311 (2018: US$25,896,613), in respect of the year ended 31 December 2019 (2018: year ended 31 December 2018) has been proposed by the Directors and are subject to approval by the shareholders at the forthcoming annual general meeting. Final and special dividends of US$18,279,962 (2018: final dividend of US$9,139,981) for the year ended 31 December 2018 (2018: year ended 31 December 2017) were paid in cash on 25 July 2019 (2018: 26 July 2018) and a special interim dividend of US$7,616,651 for the year ended 31 December 2018 was paid in cash on 8 November 2018.