Annual Report 2019

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2019 99 The United Laboratories International Holdings Limited Annual Report 2019 11. TAX EXPENSE 2019 2018 RMB’000 RMB’000 The tax charge (credit) comprises: Current tax PRC EIT 209,209 130,601 PRC withholding tax on distributed profits of PRC subsidiaries 32,500 47,500 241,709 178,101 Underprovision in prior year Hong Kong Profits tax (3,067) – PRC EIT 3,397 – 330 – Deferred tax credit (Note 33) (42,151) (67,150) 199,888 110,951 Hong Kong Profits Tax is calculated at 16.5% of the estimated assessable profits for both years. On 21 March 2018, the Hong Kong Legislative Council passed The Inland Revenue (Amendment) (No. 7) Bill 2017 (the “Bill”) which introduces the two-tiered profits tax rates regime. The Bill was signed into law on 28 March 2018 and was gazetted on the following day. Under the two-tiered profits tax rates regime, the first HK$2 million of profits of qualifying corporations will be taxed at 8.25%, and profits above HK$2 million will be taxed at 16.5%, which only one entity nominated by a group of “connected” entities will be entitled to select the lower tax rate. The profits of Group entities not entilted qualified for the two-tiered profit tax rates regime will continue to be taxed at a flat rate of 16.5%. The two-tiered profits tax rates regime are applicable to the Hong Kong subsidiaries for its annual reporting periods beginning on or after 1 January 2018. No Hong Kong Profits Tax has been recognised as its subsidiaries incorporated in Hong Kong had no assessable profits for both years. PRC EIT is calculated at the applicable rates of tax prevailing in the areas in which the Group operates, based on the existing legislation, interpretations and practices.