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2009/10 Annual Report Lenovo Group Limited
104
NOTES TO THE FINANCIAL STATEMENTS (continued)
104
9 Taxation
The amount of taxation in the consolidated income statement represents:
2010 2009
US$’000 US$’000
Current taxation
– Hong Kong profits tax 58 149
– Taxation outside Hong Kong 87,716 90,532
Deferred taxation (Note 21) (40,839) (52,237)
46,935 38,444
Hong Kong profits tax has been provided at the rate of 16.5% (2009: 16.5%) on the estimated assessable profit for the
year.
Taxation outside Hong Kong represents income and irrecoverable withholding taxes of subsidiaries operating in the
Chinese Mainland and overseas, calculated at rates applicable in the respective jurisdictions.
The Group has been granted certain tax concessions by tax authorities in the Chinese Mainland and overseas whereby the
subsidiaries operating in the respective jurisdictions are entitled to preferential tax treatment.
The differences between the Group’s expected tax charge, calculated at the domestic rates applicable to the countries
concerned, and the Group’s tax charge for the year were as follows:
2010 2009
US$’000 US$’000
Profit/(loss) before taxation 176,303 (187,945)
Tax calculated at domestic rates applicable in countries concerned 16,875 24,689
Income not subject to taxation (252,688) (248,517)
Expenses not deductible for taxation purposes 262,091 237,954
Utilization of previously unrecognized tax losses (77) (1,699)
Effect on opening deferred tax assets due to change in tax rates 867 (1,993)
Deferred tax assets not recognized 12,131 37,304
Under/(over) provision in prior years 7,736 (9,294)
46,935 38,444
The weighted average applicable tax rate was 10%. No disclosure is made for 2009 as this is not meaningful given the
Group incurred an overall loss before taxation last year.
10 Employee benefit costs
2010 2009
US$’000 US$’000
Wages and salaries (including provision for restructuring
costs of US$5,123,000 (2009: US$116,077,000)) 899,970 939,421
Social security costs 95,923 98,250
Long-term incentive awards granted to directors
and employees (Note 29(a)) 51,412 54,114
Pension costs
– defined contribution plans 32,978 25,403
– defined benefit plans 11,088 11,032
Others 90,648 109,030
1,182,019 1,237,250