Interim Report 2012 - TodayIR.com

Notes to Financial Statements30 June 201210. INCOME TAXHong Kong profits tax has been provided at the rate of 16.5% on the estimated assessable profits arising in Hong Kong during theperiod. Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the jurisdictions in which the Groupoperates.Six-month period ended 30 June2012 2011RMB’000RMB’000(unaudited)Group:Current - Mainland China charged for the period 23,903 17,069Current - Hong Kong charged for the period 1,148 1,272Deferred tax (note 26) (8,362) (6,665)Total tax charge for the period 16,689 11,676Pursuant to Section 6 of the Tax Concessions Law (1999 Revision) of the Cayman Islands, the Company has obtained an undertakingfrom the Governor-in-Council that no law which is enacted in the Cayman Islands imposing any tax to be levied on profits or incomeor gain or appreciation shall apply to the Company or its operations.Pursuant to the International Business Companies Act, 1984 (the “IBC Act”) of the BVI, international business companiesincorporated pursuant to the IBC Act enjoy a complete exemption from income tax. This includes an exemption from capital gains taxand all forms of withholding tax. Accordingly, the subsidiaries incorporated in the BVI are not subject to tax.According to the PRC Corporate Income Tax Law (“PRC CIT Law”), the applicable income tax rates for both domestic and foreigninvestment enterprises in the People’s Republic of China (the “PRC”) are unified at 25%.Shanghai Pudong Xiao Nan Guo Restaurant Co., Ltd. and Shanghai Xinqu Xiao Nan Guo Restaurant Management Co., Ltd., whichare subsidiaries of the Group located in Shanghai Pudong New Area, enjoyed preferential CIT rates of 24% for the six-month periodended 30 June 2011, according to the preferential CIT policy in the PRC. These companies are subject to a normal income tax rate of25% commencing year 2012.48XIAO NAN GUO RESTAURANTS HOLDINGS LIMITED