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Taxation (Tables)

12 Months Ended

Dec. 31, 2023

Taxation

Schedule of components of income/(loss) before tax

The components of income/(loss) before tax are as follows:

		For the year ended December 31,
		2021				2022				2023
		(RMB in millions)
Income/(loss) before tax
Income from Chinese mainland operations			14,518				16,800				33,130
Loss from non-Chinese mainland operations			(17,098	)			(2,933	)			(1,480	)
Total income/(loss) before tax			(2,580	)			13,867				31,650
Income tax benefits/(expenses) applicable to Chinese mainland operations
Current income tax expenses			(2,538	)			(4,418	)			(6,265	)
Deferred tax benefits			651				732				410
Subtotal income tax expenses applicable to Chinese mainland operations			(1,887	)			(3,686	)			(5,855	)
Income tax expenses applicable to non-Chinese mainland operations
Current income tax expenses			—				(307	)			(1,259	)
Deferred tax expenses			—				(183	)			(1,279	)
Subtotal income tax expenses applicable to non-Chinese mainland operations			—				(490	)			(2,538	)
Total income tax expenses			(1,887	)			(4,176	)			(8,393	)

Schedule of reconciliation of the differences between statutory income tax rate and the effective income tax rate

Reconciliation of difference between the PRC statutory income tax rate and the Group’s effective income tax rate for the years ended December 31, 2021, 2022 and 2023 is as follows:

		For the year ended December 31,
		2021				2022				2023
Statutory income tax rate			25.0%				25.0%				25.0%
Tax effect of preferential tax rates and tax holiday			86.0%				(19.3)%				(7.6)%
Tax effect of tax-exempt entities			(143.7)%				12.1%				3.3%
Effect on tax rates in different tax jurisdiction			(2.3)%				(3.2)%				(0.9)%
Tax effect of non-deductible expenses			(13.8)%				4.0%				0.1%
Tax effect of non-taxable income			1.4%				(0.4)%				(0.5)%
Tax effect of Super Deduction and others			105.9%				(19.0)%				(9.6)%
Changes in valuation allowance			(131.6)%				28.3%				9.1%
Effect on withholding income tax			0.0%				2.6%				7.6%
Effective tax rates			(73.1)%				30.1%				26.5%

Summary of income tax holiday

The following table sets forth the effect of tax holiday:

		For the year ended December 31,
		2021				2022				2023
Tax holiday effect (RMB in millions)			2,219				2,677				2,397
Effect of tax holiday on basic net income per share (RMB)			0.71				0.86				0.76
Effect of tax holiday on diluted net income per share (RMB)			0.71				0.84				0.76

Schedule of deferred tax assets and deferred tax liabilities

		As of December 31,
		2022				2023
		(RMB in millions)
Deferred tax assets
- Net operating loss carry forwards and others			12,715				15,909
- Deferred revenues			472				464
- Inventory valuation allowance			1,029				1,092
- Allowance for doubtful accounts			1,001				1,098
- Unrealized fair value losses for certain investments			595				238
Less: valuation allowance			(14,276	)			(17,057	)
Net deferred tax assets			1,536				1,744
Deferred tax liabilities
- Long-lived assets arisen from business combinations and asset acquisitions			5,598				6,638
- Withholding tax on undistributed earnings			183				1,779
- Accelerated tax depreciation and others			730				850
Total deferred tax liabilities			6,511				9,267

Schedule of movement of valuation allowance

The movements of valuation allowance of deferred tax assets are as follows:

		For the year ended December 31,
		2021				2022				2023
		(RMB in millions)
Balance at beginning of the year			4,289				7,670				14,276
Additions			5,052				7,694				6,630
Reversals			(1,671	)			(1,088	)			(3,849	)
Balance at end of the year			7,670				14,276				17,057

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure of income before income tax between domestic and foreign jurisdictions.

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Tabular disclosure of the income tax exemptions and reductions which have been granted by taxing authorities for a specified period, applicable term of the exemptions and reductions, estimated dollar value of tax benefits, and per share benefits.

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