Annual Report 2021

138 Notes to the Financial Statements Annual Report 2021 Miramar Hotel and Investment Company, Limited 4 Taxation in the consolidated statement of profit or loss (Continued) (a) Taxation in the consolidated statement of profit or loss represents: (continued) 2021 2020 HK$’000 HK$’000 Deferred tax Change in fair value of investment properties (171) 45 Origination and reversal of temporary differences (3,040) 7,338 (3,211) 7,383 87,106 99,366 Provision for Hong Kong Profits Tax is calculated at 16.5% (2020: 16.5%) on the estimated assessable profits for the year, except for one subsidiary of the Group which is a qualifying corporation under the two-tiered Profits Tax rate regime. For this subsidiary, the first HK$2 million of assessable profits are taxed at 8.25% and the remaining assessable profits are taxed at 16.5%. The provision for Hong Kong Profits Tax for this subsidiary was calculated at the same basis in 2020. Overseas taxation is calculated at rates of tax applicable in the jurisdictions in which the Group is assessed for tax. Share of associates’ taxation for the year ended 31 December 2021 of HK$27,000 (2020: HK$23,000) is included in the share of profits less losses of associates. (b) Reconciliation between tax expense and profit before taxation at applicable tax rates: 2021 2020 HK$’000 HK$’000 Profit before taxation 422,759 408,305 Notional tax on profit before taxation, calculated at the rates applicable to profits in the jurisdictions concerned 69,092 67,405 Tax effect of non-deductible expenses 26,797 38,669 Tax effect of non-taxable income (16,547) (34,729) Tax effect of unused tax losses not recognised in the year 12,293 29,456 Tax effect of tax losses not recognised in prior years utilised this year (3,716) (1,617) (Over)/under-provision in prior years (813) 182 Actual tax expense 87,106 99,366