Lenovo 2014 Annual Report Download - page 159
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157
2013/14 Annual Report Lenovo Group Limited
9 Taxation
The amount of taxation in the consolidated income statement represents:
2014 2013
US$’000 US$’000
Current tax
– Hong Kong profits tax 13,024 1,328
– Taxation outside Hong Kong 201,175 181,267
Deferred tax (Note 21) (17,474) (12,888)
196,725 169,707
Hong Kong profits tax has been provided at the rate of 16.5% (2013: 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:
2014 2013
US$’000 US$’000
Profit before taxation 1,014,195 801,299
Tax calculated at domestic rates applicable in countries concerned 231,160 137,345
Income not subject to taxation (427,986) (137,918)
Expenses not deductible for taxation purposes 192,706 133,750
Utilization of previously unrecognized tax losses (3,841) (69,347)
Effect on opening deferred income tax assets due to change in tax rates 359 (844)
Deferred income tax assets not recognized 151,136 76,772
Under-provision in prior years 53,191 29,949
196,725 169,707
The weighted average applicable tax rate for the year was 22.8% (2013: 17.1%).The increase is caused by changes in tax
concessions and profitability of the Group’s subsidiaries in respective countries they are operating.