2006 Interim Report－A Share.pdf - 中国银行

Notes to the Condensed Financial Statements
For the six month period ended 30 June 2006
(Amount in millions of Renminbi, unless otherwise stated)
27. Impairment losses
For the six month period ended
30 June 2006 30 June 2005
Provision for loan losses 5,062 4,718
(Write-back of )/Provision for impairment of
foreclosed assets
(Write-back of )/Provision for impairment of
other receivables
Write-back of impairment of fixed assets
and others
(131) 96
(55) 206
(444)
Total 4,876 4,576
28. Income tax
For the six month period ended
30 June 2006 30 June 2005
Current tax 12,136 10,998
Deferred tax (Note III.13) 226 (138)
Total 12,362 10,860
The income tax expense on the Group's profit before tax differs from the amount that would arise using the basic tax
rate of the Group, detailed as follows:
For the six month period ended
30 June 2006 30 June 2005
Profit before tax 34,013 29,578
Tax calculated at a tax rate of 33% 11,224 9,761
Effect of different tax rates in overseas operations (1,927) (1,479)
Supplementary tax on overseas income paid in the PRC 1,688 865
Prior years tax expenses adjustment (1) (350) (2)
Income not subject to tax (1,223) (614)
Expenses not deductible for tax purposes (2) 2,921 2,452
Others 29 (123)
Total 12,362 10,860
(1) Prior years tax expenses adjustment included the related tax impact of RMB 284 million in relation to the deductible
transfer loss of BOC with the amount of RMB 860 million approved by MOF and SAT in the first half of Year 2006. The
loss arose from the disposal of certain equity investments in prior years.
(2) Non-deductible expenses primarily include staff salary costs in excess of those permitted to be deducted under the
relevant PRC tax regulations. The Group is currently in the process of applying for a revision to the statutory salary
deductible threshold for its domestic employees from the PRC State Administration of Taxation ("SAT"). In accordance
with Guoshuihan[2006] No. 484, "Response Letter on the Bank of China Limited salary deduction matter"issued by
SAT on 19 May 2006, it was agreed in principle that, after the overseas listing of the Bank, the salary costs that are
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