Annual Report 2012 - TodayIR.com

Lonking Holdings Limited
Annual Report 2012
Notes to the Consolidated Financial Statements
For the year ended 31 December 2012
30. DEFERRED TAX (Continued)
Deferred tax liabilities:
Group
Fair value Withholding
arising from taxes on
acquisition of undistributed Capitalised
a subsidiary dividends interest Total
RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2011 3,600 44,070 – 47,670
(Credited)/charged to
profit or loss for the year (510) 24,976 – 24,466
At 31 December 2011 3,090 69,046 – 72,136
(Credited)/charged to
profit or loss for the year (511) 6,677 5,342 11,508
At 31 December 2012 2,579 75,723 5,342 83,644
At the end of the reporting period, certain subsidiaries of the Group have unused tax losses arising
in Mainland China of RMB47,646,000 (2011: RMB69,364,000) that will expire in one to five years
for offsetting against future taxable profits. No deferred tax asset has been recognised in respect
of such losses as they have arisen in subsidiaries that have been loss-making for some time and it
is not considered probable that taxable profits will be available against which the above tax losses
can be utilised.
Pursuant to the PRC Corporate Income Tax Law, a 10% withholding tax is levied on dividends
declared to foreign investors from the foreign investment enterprises established in Mainland
China. The requirement is effective from 1 January 2008 and applies to earnings after 31 December
2007. A lower withholding tax rate may be applied if there is tax treaty between Mainland China
and the jurisdiction of the foreign investors. For the Group, the applicable rate is 5%. The Group
is therefore liable for withholding taxes on dividends distributed by those subsidiaries established
in Mainland China in respect of earnings generated from 1 January 2008.
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