NOTES TO FINANCIAL STATEMENTS
December 31, 2015
30
INCOME TAX (Cont’d)
The income tax expense varied from the amount of income tax expense determined by applying the above income
tax rate to profit before income tax as a result of the following differences:
GROUP
2015
2014
RMB’000
RMB’000
(Restated)
Profit before income tax
4,317,113
3,619,579
Income tax expense at PRC applicable tax rate of 25%* (2014 : 25%*)
1,079,278
904,895
Non-deductible items
270,089
184,443
Non-taxable items
(23,234)
(65,885)
Effect of unutilised tax losses not recognised as deferred tax assets
87,151
65,412
Effect of different tax rates for certain subsidiaries
11,416
8,953
LAT
677,154
461,288
Effect of tax deduction on LAT
(169,288)
(115,322)
Withholding tax incurred
111,158
76,009
Under provision in prior years
24,713
8,796
Others
(121,747)
(55,321)
Total income tax expense
1,946,690
1,473,268
*
These are the applicable tax rates for most of the Group’s taxable profits.
Income tax for overseas subsidiaries is calculated at the rates prevailing in the respective jurisdiction.
According to a PRC tax circular of State Administration of Taxation, Guoshuihan (2008) No.112, dividend distributed
out of the profits generated since January 1, 2008 held by the PRC entity to non-resident investors shall be subject to
PRC withholding income tax. Deferred tax liability of RMB111 million (2014 : RMB76 million) on the undistributed
earnings of the PRC subsidiaries has been charged to the consolidated statement of profit or loss of the year.
LAT
As disclosed in the prior years’ audited consolidated financial statements, provision for the LAT with respect to
properties sold in Shanghai Pudong New District prior to October 1, 2006 were not made as the directors of the
Company, after taking into account legal advice received and consultation with the local Shanghai Pudong Tax
Bureau, were of the opinion that the relevant tax authority is not likely to impose any LAT on a retrospective basis.
As at December 31, 2014, the tax settlement process for a completed project and a phase of a project with properties
sold in Shanghai Pudong New District prior to October 1, 2006 had been completed, with additional LAT payments
made by the Group. For the projects with properties sold in Shanghai Pudong New District subsequent to October
1, 2006, the tax settlement amount determined by the tax authorities for a phase of a project which has commenced
the tax settlement process was lower than what the Group has previously provided for based on the tax laws.
Management has assessed and considers that the provision for LAT made by the Group relating to the above projects
for which the tax settlement process had commenced or completed was adequate to meet the tax settlement amount
determined by the tax authorities.
YANLORD LAND GROUP LIMITED
ANNUAL REPORT 2015
124
