Annual Report 2023

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2023 94 The United Laboratories International Holdings Limited Annual Report 2023 11. TAX EXPENSE (Continued) The tax expense 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: 2023 2022 RMB’000 RMB’000 Profit before taxation 3,344,148 2,006,766 Tax at the PRC EIT rate of 25% (2022: 25%) 836,037 501,692 Tax effect of share of results of an associate (36) 47 Tax effect of expenses not deductible for tax purpose 115,599 104,877 Tax effect of income not taxable for tax purpose (44,822) (34,494) Tax effect of super deduction of research and development expenses (Note) (89,191) (51,098) Tax effect of tax losses not recognised 18,516 17,652 Utilisation of tax losses previously not recognised (18,152) (3,103) Tax effect of deductible temporary differences not recognised – (3,320) PRC withholding tax on distributable profits of the PRC subsidiaries 136,712 83,050 PRC withholding tax on interest income 5,908 7,316 PRC withholding tax on royalty income 79 – Effect of tax concessionary rates granted to the PRC subsidiaries (315,972) (196,285) Effect of different tax rates of subsidiaries operating in other jurisdictions (795) – Others (580) (591) Tax expense for the year 643,303 425,743 Note: Pursuant to State Administration of Taxation Announcement No. 7, 2023 (2022: Caishui [2021] circular No. 13), the Group is able to enjoy super deduction of 200% on qualifying research and development expenditures for the years ended 31 December 2023 and 2022.