Annual Report 2020

China Merchants China Direct Investments Limited Annual Report 2020 124 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2020 12. TAXATION (CONTINUED) The tax charge for the year can be reconciled to the profit before taxation per the consolidated statement of profit or loss and other comprehensive income as follows: 2020 2019 US$ US$ Profit before taxation 121,554,717 136,355,337 Tax at the domestic income tax rate of 25% (2019: 25%) (Note 1) (30,388,679) (34,088,834) Tax effect of expenses not deductible for tax purpose (5,047,003) (3,008,057) Tax effect of income not taxable for tax purpose 3,499,281 4,139,664 Tax effect of tax losses not recognised (2,079,414) (94,448) Utilisation of tax losses previously not recognised 104,886 706,743 Utilisation of deductible temporary difference previously not recognised — 67,647 Withholding tax for undistributed earnings of PRC subsidiaries (882,019) (3,845,576) Withholding tax for distributed earnings (2,032,086) (985,578) Effect of different tax rates of the Company and its subsidiaries operating in other regions in the PRC (Note 2) 5,058,072 2,646,576 Others — (84,500) Taxation (31,766,962) (34,546,363) Note 1: The domestic tax rate (which is PRC Enterprise Income Tax rate applicable to the Company’s major subsidiaries in the PRC) represents the tax rate in the jurisdiction where the investments of the Group are substantially located. Note 2: Tax rates range from withholding tax of 10% to PRC Enterprise Income Tax of 25%. 13. DIVIDENDS Subsequent to the end of the reporting period, a final dividend of US$0.07 per share (2019: US$0.07 per share) and a special dividend of US$0.01 per share (2019: Nil), totaling US$0.08 (2019: US$0.07) per share, in an aggregate amount of US$12,186,641 (2019: US$10,663,311), in respect of the year ended 31 December 2020 (2019: year ended 31 December 2019) have been proposed by the Directors and are subject to approval by the shareholders at the forthcoming annual general meeting. Final dividend of US$10,663,311 (2019: final and special dividends of US$18,279,962) for the year ended 31 December 2019 (2019: year ended 31 December 2018) was paid in cash on 27 July 2020 (2019: 25 July 2019).