Annual Report 2021

China Merchants China Direct Investments Limited Annual Report 2021 126 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2021 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: 2021 2020 US$ US$ Profit before taxation 43,020,768 121,554,717 Tax at the domestic income tax rate of 25% (2020: 25%) (Note) (10,755,192) (30,388,679) Tax effect of expenses not deductible for tax purpose (4,505,864) (5,047,003) Tax effect of income not taxable for tax purpose 3,031,736 3,499,281 Tax effect of tax losses not recognised (365) (2,079,414) Utilisation of tax losses previously not recognised 2,243,008 104,886 Withholding tax for undistributed earnings of PRC subsidiaries (2,769,098) (882,019) Withholding tax for distributed earnings (1,908,006) (2,032,086) Effect of different tax rates of the Company and its subsidiaries operating in other regions in the PRC (4,151,620) 5,058,072 Taxation (18,815,401) (31,766,962) Note: 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. 13. DIVIDENDS Subsequent to the end of the reporting period, a final dividend of US$0.07 per share (2020: US$0.07 per share) and a special dividend of US$0.07 per share (2020: US$0.01 per share), totaling US$0.14 (2020: US$0.08) per share, in an aggregate amount of US$21,326,622 (2020: US$12,186,641), in respect of the year ended 31 December 2021 (2020: year ended 31 December 2020) have been proposed by the Directors and are subject to approval by the shareholders at the forthcoming annual general meeting. Final and special dividends of US$12,186,641 (2020: final dividend of US$10,663,311) for the year ended 31 December 2020 (2020: year ended 31 December 2019) were paid in cash on 27 July 2021 (2020: 27 July 2020).