NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
7
INCOME TAX IN THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(a)
Taxation in the consolidated statement of profit or loss represents:
2016
HK$'000
2015
HK$'000
Current tax - Hong Kong Profits Tax
Provision for the year
35,356
31,890
Under/(over)-provision in respect of prior years
11,691
(81)
47,047
31,809
Deferred tax
Origination and reversal of temporary differences
4,895
6,747
51,942
38,556
The provision for Hong Kong Profits Tax for 2016 is calculated at 16.5% (2015: 16.5%) of the estimated assessable profits for the year, taking into account a reduction granted by the Government of Hong Kong Special Administrative Region of 75% of the tax payable for the year of assessment 2015/16 subject to a maximum reduction of HK$20,000 for each business (2015: a maximum reduction of HK$20,000 was granted for the year of assessment 2014/15 and was taken into account in calculating the provision for 2015).
In prior years, the Inland Revenue Department ("IRD") raised additional profits tax assessments on a subsidiary of the Group covering the years of assessment from 2001/02 to 2009/10 as the IRD disallowed the deduction of certain capital expenditure incurred by the subsidiary. Notices of objection were filed with the IRD by the subsidiary. In February 2017, the IRD further raised additional profits tax assessments covering the years of assessment from 2010/11 to 2014/15 in respect of such disallowance. Management has sought advice from the Group's tax adviser and will file a notice of objection against such additional tax assessments.
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Hong Kong Ferry (Holdings) Company Limited Annual Report 2016
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