ESR AR 2019 EN

Notes to the Consolidated Financial Statements 31 December 2019 174 Focused 10. INCOME TAX EXPENSE 2019 2018 USD’000 USD’000 Current tax 40,903 13,871 Deferred tax (note 29) 41,031 43,838 81,934 57,709 The Company was incorporated in the Cayman Islands as an exempted company with limited liability under the Cayman Islands Companies Law and is exempted from the payment of Cayman Islands income tax. During the year, Hong Kong profits tax has been provided at the rate of 16.5% on the assessable profits arising in Hong Kong (2018: 16.5%). During the year, the subsidiaries incorporated in The PRC are subject to PRC income tax at the rate of 25% (2018: 25%). Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the jurisdictions in which the Group operates. A reconciliation of the tax expense applicable to profit before tax using the applicable rate for the jurisdictions in which the Company and the majority of its subsidiaries are domiciled to the tax expense at the effective tax rates is as follows: 2019 2018 USD’000 USD’000 Profit before tax 360,334 270,587 Tax at the statutory tax rates 84,280 66,940 Profits attributable to joint ventures (15,012) (7,884) Income not subject to tax (11,824) (6,323) Non-deductible expenses 3,077 2,385 Effect of withholding tax 17,727 1,372 Unrecognised deductible temporary differences 1,109 258 Adjustment of current tax of previous periods (257) 304 Utilisation of tax losses not recognised in previous periods (4,516) – Tax losses not recognised 7,345 657 Others 5 – Tax charge 81,934 57,709 During the year, the share of tax attributable to joint ventures of USD15,012,000 (2018: USD7,884,000), is included in “Share of profits and losses of joint ventures” in the consolidated statement of profit or loss and other comprehensive income.