Investor Presentaiton
HKAS 1.51(a)
HKAS 1.49
HK Listco Ltd
Financial statements for the year ended 31 December 2023
6
INCOME TAX IN THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS
HKAS 12.79
(a) Taxation in the consolidated statement of profit or loss represents:
2023
$'000
2022
$'000
(restated)
CP
HKAS 12.80(a)
Current tax - Hong Kong Profits Tax 142
Provision for the year
13,000
14,849
HKAS 12.80(b)
Under/(over)-provision in respect of prior years
61
(300)
13,061
14,549
CP
Current tax - Overseas 142
HKAS 12.80(a)
Provision for the year
HKAS 12.80(b)
Over-provision in respect of prior years
7,769
6,950
(619)
7,150
6,950
Deferred tax
HKAS 12.80(c)
Origination and reversal of temporary differences
4,264
(489)
Effect on deferred tax balances at 1 January resulting from a
change in tax rate (note 30(b))
4,264
325
(164)
HKAS 12.81(c)
24,475
21,335
The provision for Hong Kong Profits Tax 143 for 2023 is calculated at 16.5% (2022: 16.5%) of the estimated
assessable profits for the year, except for one subsidiary of the group which is a qualifying corporation
under the two-tiered Profits Tax rate regime 144
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 at the same basis in 2022.
142
143
Under the predecessor Companies Ordinance (Cap. 32) and the previous version of Appendix 16 to the MBLRS, the amounts of tax
payable to the Hong Kong tax authorities and overseas tax authorities needed to be separately disclosed. Such separation is no
longer required but we expect that it may continue to be a common practice to separately disclose these amounts if the
information is considered useful.
On 1 January 2023, the Inland Revenue (Amendment) (Taxation on Specified Foreign-sourced Income) Ordinance 2022 came into
effect. This legislation has introduced a new "foreign-sourced income exemption" (FSIE) regime in the Hong Kong SAR.
Before the new FSIE regime, the following four types of income had been non-taxable for Hong Kong Profits Tax purposes if sourced
offshore. Under the new FSIE regime, with certain exceptions, such income is no longer exempt when received by an entity that
carries out a trade, profession or business in the Hong Kong SAR, if that entity is within a multinational group:
• interest;
• dividend;
•
•
disposal gain from the sale of equity interests in an entity;
intellectual property income (e.g. licence fee).
144
Further details about the new FSIE regime including the exceptions can be found in Tax Alerts or from your usual KPMG contact.
In this illustration, it is assumed that HK Listco either meets the exception requirements for any of the above offshore-sourced
income such that those income is not taxable in the Hong Kong SAR, or does not have the relevant income at all. Accordingly, the
new FSIE regime does not impact HK Listco's current tax and deferred tax positions.
Under the two-tiered profits tax rate regime enacted by the Inland Revenue (Amendment) (No. 3) Ordinance 2018 (the Ordinance),
the first HK$2 million of assessable profits of qualifying corporations is taxed at 8.25% and the remaining assessable profits are
taxed at 16.5%. The Ordinance is effective from the year of assessment 2018/2019. For each year of assessment, only one entity in
a group is eligible for the two-tiered profits tax rates. Consequently, if a group company (i.e. the parent company, a fellow
subsidiary or a subsidiary) of the reporting entity has elected to claim the 8.25% band for a particular year of assessment, the
reporting entity will not be eligible for the lower tax rate for that year of assessment.
93
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