2018E — Page 125

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

6

INCOME TAX IN THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS

(a)

Taxation in the consolidated statement of profit or loss represents:

2018

2017

(restated)

HK$'000

HK$'000

Current tax

Hong Kong Profits Tax

Provision for the year

Over-provision in respect of prior years

Deferred tax

Origination and reversal of temporary differences

46,847

27,532

(186)

(175)

46,661

27,357

6,453

5,045

53,114

32,402

The provision for Hong Kong Profits Tax for 2018 is calculated at 16.5% (2017: 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 2017/18 subject to a maximum reduction of HK$30,000 for each business (2017: a maximum reduction of HK$20,000 was granted for the year of assessment 2016/17 and was taken into account in calculating the provision for 2017).

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 has filed a notice of objection against such additional tax assessments.

Hong Kong Ferry (Holdings) Company Limited

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Annual Report 2018

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