Investor Presentaiton

HKAS 1.51(a) HKAS 1.49 (c) Pillar Two income taxes HK Listco Ltd Financial statements for the year ended 31 December 2023 HKAS 12.88A HKAS 12.88C-88D The group operates in [country K], which has enacted new tax laws to implement the Pillar Two model rules published by the OECD. The new tax laws will take effect from 1 January 2024. When these laws take effect, the group expects to be subject to a new top-up tax in [country K] in relation to its operations in [country F] and [country G], where the local statutory tax rate is lower than 15% or the additional tax deductions in connection with government support would result in an effective tax rate of lower than 15%. As the new tax laws are not yet effective, the group does not recognise any current tax relating to the Pillar Two model rules for the year ended 31 December 2023. The group has applied the temporary mandatory exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes and would account for the tax as current tax when incurred (see note 1(c)(i)). If the new tax laws had applied in [country K] in 2023, the profits relating to the group's operations in [country F and country G] would be subject to the corresponding Pillar Two income taxes. For the year ended 31 December 2023, such profits amounted to $5,971,000 and the average effective tax rate applicable to those profits was 12%. 147 HKAS 12.88C-88D 147 CP An entity may operate in multiple jurisdictions, some of which have enacted or substantively enacted tax laws to implement the Pillar Two model rules published by the OECD, but those laws are not yet in effect as at the reporting date. In such case, the entity is required to disclose qualitative and quantitative information to help users of financial statement to understand the entity's exposure to the Pillar Two income taxes, to the extent that such information is known or reasonably estimable. Such disclosures do not have to reflect all the specific requirements of the related tax laws and can be provided in the form of an indicative range. To the extent information is not known or reasonably estimable, the entity shall instead disclose a statement to that effect and disclose information about the entity's progress in assessing its exposure. Examples of information an entity could disclose to meet the requirements include: (a) qualitative information such as information about how an entity is affected by the tax law to implement Pillar Two model rules and the main jurisdiction in which exposures to Pillar Two income taxes might exist; and (b) quantitative information such as: (i) an indication of the proportion of an entity's profits that might be subject to Pillar Two income taxes and the average effective tax rate applicable to those profits; or (ii) an indication of how the entity's average effective tax rate would have changed if the tax law to implement Pillar Two model rules had been in effect. In this illustration, it is assumed that new tax laws implementing the Pillar Two model rules have been enacted or substantively enacted by 31 December 2023 in at least one of the jurisdictions in which HK Listco operates and HK Listco expects to be impacted by the new tax laws. Accordingly, HK Listco has disclosed the required information. It may be that none of the jurisdictions in which an entity operates have tax laws enacted or substantively enacted by the reporting date to implement the Pillar Two model rules, but the entity expects to be impacted by the forthcoming tax changes. While HKAS 12 does not require the above-mentioned disclosures about the expected tax exposures, disclosures following the above principles would nevertheless be best practice. 95 © 2023 KPMG, a Hong Kong partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited ("KPMG International"), a private English company limited by guarantee. All rights reserved.

View entire presentation