Lenovo 2013 Annual Report Download - page 147
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2012/13 Annual Report Lenovo Group Limited 145
9 Taxation
The amount of taxation in the consolidated income statement represents:
2013 2012
US$’000 US$’000
Current tax
– Hong Kong profits tax 1,328 236
– Taxation outside Hong Kong 181,267 174,548
Deferred tax (Note 21) (12,888) (67,757)
169,707 107,027
Hong Kong profits tax has been provided at the rate of 16.5% (2012: 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 tax concessions.
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 are as follows:
2013 2012
US$’000 US$’000
Profit before taxation 801,299 582,443
Tax calculated at domestic rates applicable in countries concerned 137,345 180,375
Income not subject to taxation (137,918) (123,533)
Expenses not deductible for taxation purposes 133,750 108,375
Utilization of previously unrecognized tax losses (69,347) (87,565)
Effect on opening deferred income tax assets due to change in tax rates (844) (7,660)
Deferred income tax assets not recognized 76,772 32,812
Under-provision in prior years 29,949 4,223
169,707 107,027
The weighted average applicable tax rate for the year was 17.1% (2012: 31%). The decrease is caused by changes in tax
concessions and profitability of the group’s subsidiaries in respective countries they are operating.
The tax (charge)/credit relating to components of other comprehensive income is as follows:
2013 2012
Before Tax After Before Tax After
tax charge tax tax credit tax
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
Fair value change on
available-for-sale financial assets (4,057) – (4,057) (36,337) – (36,337)
Fair value change on cash flow hedges 19,798 (26) 19,772 33,797 61 33,858
Actuarial loss from defined benefit pension plans (17,174) (1,632) (18,806) (37,537) 2,834 (34,703)
Currency translation differences (118,602) – (118,602) (51,055) – (51,055)
Other comprehensive income (120,035) (1,658) (121,693) (91,132) 2,895 (88,237)
Current tax ––
Deferred tax (Note 21) (1,658) 2,895
(1,658) 2,895