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Notes to the Consolidated Financial Statements

31st March 2018

11 INCOME TAX EXPENSE

Hong Kong profits tax has been provided at the rate of 16.5% (2017: 16.5%) on the estimated
assessable profit for the year. Taxation on overseas profits has been calculated on the estimated
assessable profit for the year at the rates of taxation prevailing in the countries in which the Group
operates.

2018 2017
HK$’000 HK$’000

Current income tax
– Hong Kong profits tax 5 16
– PRC corporate income tax 2,036 530
– Overseas corporate income tax 69 60
– Under/(over) provision in prior years 2 (16)
Deferred income tax charge (Note 27) 12,525 3,397

Income tax expense 14,637 3,987

The tax on the Group’s (loss)/profit before income tax differs from the theoretical amount that would
arise using the tax rate of Hong Kong as follows:

2018 2017
HK$’000 HK$’000

(Loss)/profit before income tax (71,299) 77,879
Tax calculated at a tax rate of 16.5% (2017: 16.5%) (11,764) 12,850
Effect of different tax rates in other countries (455) (12)
Income not subject to tax (11,932) (14,726)
Expenses not deductible for tax purposes 11,472 5,881
Under/(over) provision in prior years 2 (16)
Reversal of tax losses previously recognised 14,135 –
Tax losses unrecognised 13,226 10
Utilisation of previously recognised tax loss (47) –

Income tax expense 14,637 3,987

ALCO HOLDINGS LIMITED ANNUAL REPORT 2018 95