Annual Report 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2025 146 China Merchants China Direct Investments Limited Annual Report 2025 12. TAXATION (CONTINUED) The tax (charge) credit for the year can be reconciled to the profit before taxation per the consolidated statement of profit or loss and other comprehensive income as follows: 2025 2024 US$ US$ Profit before taxation 247,992,728 148,335,878 Tax at the domestic income tax rate of 25% (2024: 25%) (Note) (61,998,182) (37,083,969) Tax effect of expenses not deductible for tax purpose (193,616) (3,452,962) Tax effect of income not taxable for tax purpose 4,572,952 6,350,475 Tax effect of tax losses not recognised (640,968) (1,214,594) Utilisation of tax losses not recognised 606,368 374,064 Withholding tax for undistributed earnings of PRC subsidiaries (7,494,547) (31,714) Withholding tax for distributed earnings (360,539) (2,814,548) Effect of different tax rates of the Company and its subsidiaries operating in other regions in the PRC 7,741,571 9,870,148 (Under) Over provision in prior years (287,903) 18,536 Taxation (58,054,864) (27,984,564) 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.