Annual Report 2019

176 Transport International Holdings Limited 2019 Annual Report Notes to the Financial Statements (Expressed in Hong Kong dollars unless otherwise indicated) 6 Income tax in the consolidated statement of profit or loss (a) Taxation in the consolidated statement of profit or loss represents: 2019 2018 $’ 000 $’ 000 Current tax – Hong Kong profits tax Provision for the year 58,393 38,374 Under/(over)-provision in respect of prior years 43,762 (926) 102,155 37,448 PRC withholding tax 943 1,562 103,098 39,010 Deferred tax Origination and reversal of temporary differences (9,086) 78,183 94,012 117,193 The provision for Hong Kong profits tax for 2019 is calculated at 16.5% (2018: 16.5%) of the estimated assessable profits for the year, except for a subsidiary of the Group which is a qualifying corporation under the two-tier profits tax rate regime. For this subsidiary, the first HK$2 million of assessable profits are taxed at 8.25% and the remaining assessable profits are taxed at 16.5%. The provision for Hong Kong profits tax for this subsidiary was calculated using the same basis in 2018. (b) Reconciliation between tax expense and accounting profit at the applicable tax rates: 2019 2018 $’ 000 $’ 000 Profit before taxation 699,323 837,265 Notional tax on profit before taxation, calculated at the rates applicable to profits in the tax jurisdictions concerned 116,634 139,296 Tax effect of non-deductible expenses 4,327 8,166 Tax effect of non-taxable income (26,204) (28,968) Tax effect of unused tax losses not recognised 22 67 Tax effect of utilisation of unused tax losses not recognised in prior years – (57) Tax effect of temporary difference previously not recognised (44,316) – Under/(over)-provision in prior years 43,762 (926) Others (213) (385) Actual tax expense 94,012 117,193