Annual Report 2020

190 Transport International Holdings Limited 2020 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: 2020 2019 $’ 000 $’ 000 Current tax – Hong Kong Profits Tax Provision for the year 17,139 58,393 (Over)/under-provision in respect of prior years (24,244) 43,762 (7,105) 102,155 PRC withholding tax 1,262 943 (5,843) 103,098 Deferred tax Origination and reversal of temporary differences (176,115) (9,086) (181,958) 94,012 The provision for Hong Kong Profits Tax for 2020 is calculated at 16.5% (2019: 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%. (b) Reconciliation between tax (credit)/expense and accounting profit at the applicable tax rates: 2020 2019 $’ 000 $’ 000 Profit before taxation 1,722,156 699,323 Notional tax on profit before taxation, calculated at the rates applicable to profits in the tax jurisdictions concerned 284,837 116,634 Tax effect of non-deductible expenses 4,946 4,327 Tax effect of non-taxable income (434,228) (26,204) Tax effect of unused tax losses not recognised 841 22 Tax effect of temporary differences previously not recognised (12,780) (44,316) (Over)/under-provision in respect of prior years (24,244) 43,762 Others (1,330) (213) Actual tax (credit)/expense (181,958) 94,012