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TAXATION (Tables) | 6 Months Ended | 9 Months Ended
--- | --- | ---
Jun. 30, 2022 | Sep. 30, 2022
TAXATION |  |
Schedule of current and deferred portion of income tax expenses | ​
​ | ​ | ​ | ​ | ​
​ |  | Six months ended June 30,
​ |  | 2021 |  | 2022
​ | ​ | (HK$ in thousands)
​ | ​ | ​ | ​ | ​
Current income tax expenses | ​ | 215,288 |  | 143,732
Deferred income tax benefit | ​ | (8,791) |  | (534)
Income tax expenses | ​ | 206,497 |  | 143,198
| ​
​ | ​ | ​ | ​ | ​
​ |  | Nine months ended September 30,
​ |  | 2021 |  | 2022
​ | ​ | (HK$ in thousands)
Current income tax expenses | ​ | 309,534 |  | 259,279
Deferred income tax benefit | ​ | (8,266) |  | (11,707)
Income tax expenses | ​ | 301,268 |  | 247,572
Schedule of reconciliation between the income tax (benefit)/expenses computed by applying the Hong Kong enterprise tax rate to income before income taxes and actual provision | ​
​ | ​ | ​ | ​ | ​
​ |  | Six months ended June 30,
​ |  | 2021 |  | 2022
​ | ​ | (HK$ in thousands)
​ | ​ | ​ | ​ | ​
Income before income tax | ​ | 1,902,687 |  | 1,366,121
Tax expenses at Hong Kong profit tax rate of 16.5% | ​ | 313,943 |  | 225,245
Changes of valuation allowance | ​ | 51,486 |  | 1,300
Tax effect of permanence differences | ​ | 5,948 |  | 20,365
Effect of income tax jurisdictions other than Hong Kong | ​ | (6,282) |  | 921
Super deduction of research and development expenses | ​ | (21,597) | ​ | (31,895)
Final settlement differences | ​ | — | ​ | (2,418)
Income not subject to tax (1) | ​ | (137,001) | ​ | (70,320)
Income tax expenses | ​ | 206,497 |  | 143,198
(1) | This amount mainly represents tax exemption relating to the offshore income of Futu Securities. The brokerage commission income derived from executing the clients’ orders of US listed securities was treated as offshore-sourced and non-taxable on the basis that these transactions were executed outside Hong Kong.
| ​
​ | ​ | ​ | ​ | ​
​ |  | Nine months ended September 30,
​ |  | 2021 |  | 2022
​ | ​ | (HK$ in thousands)
Income before income tax | ​ | 2,612,670 |  | 2,229,064
Tax expenses at Hong Kong profit tax rate of 16.5% | ​ | 431,091 |  | 367,631
Changes of valuation allowance | ​ | 91,776 |  | (31,771)
Tax effect of permanence differences | ​ | 9,908 |  | 36,881
Effect of income tax jurisdictions other than Hong Kong | ​ | (14,548) |  | 27,665
Super deduction of research and development expenses | ​ | (37,407) | ​ | (61,940)
Final settlement differences | ​ | — | ​ | (3,614)
Income not subject to tax (1) | ​ | (179,552) | ​ | (87,280)
Income tax expenses | ​ | 301,268 |  | 247,572
(1) | This amount mainly represents tax exemption relating to the offshore income of Futu Securities. The brokerage commission income derived from executing the clients’ orders of US listed securities was treated as offshore-sourced and non-taxable on the basis that these transactions were executed outside Hong Kong.
Schedule of components of the deferred tax assets and liabilities | ​
​ | ​ | ​ | ​ | ​
​ |  | As of December 31, | ​ | As of June 30,
​ |  | 2021 |  | 2022
​ | ​ | (HK$ in thousands)
Deferred tax assets | ​ | ​ | ​ | ​
Net operating loss carryforwards | ​ | 158,826 |  | 156,774
Accrued expenses and others | ​ | 50,408 |  | 52,082
Less: valuation allowance | ​ | (169,422) |  | (170,722)
Total deferred tax assets | ​ | 39,812 | ​ | 38,134
Set-off of deferred tax liabilities pursuant to set-off provisions | ​ | (1,495) | ​ | (1,648)
Net deferred tax assets | ​ | 38,317 |  | 36,486
​ | ​ | ​ | ​ | ​
Total deferred tax liabilities | ​ | 2,131 | ​ | 9,291
Set-off of deferred tax assets pursuant to set-off provisions | ​ | (1,495) | ​ | (1,648)
Net deferred tax liabilities | ​ | 636 | ​ | 7,643
| ​
​ | ​ | ​ | ​ | ​
​ |  | As of December 31, | ​ | As of September 30,
​ |  | 2021 |  | 2022
​ | ​ | (HK$ in thousands)
Deferred tax assets | ​ | ​ | ​ | ​
Net operating loss carryforwards | ​ | 158,826 |  | 124,678
Accrued expenses and others | ​ | 50,408 |  | 65,011
Less: valuation allowance | ​ | (169,422) |  | (137,651)
Total deferred tax assets | ​ | 39,812 | ​ | 52,038
Set-off of deferred tax liabilities pursuant to set-off provisions | ​ | (1,495) | ​ | (976)
Net deferred tax assets | ​ | 38,317 |  | 51,062
​ | ​ | ​ | ​ | ​
Total deferred tax liabilities | ​ | 2,131 | ​ | 14,422
Set-off of deferred tax assets pursuant to set-off provisions | ​ | (1,495) | ​ | (976)
Net deferred tax liabilities | ​ | 636 | ​ | 13,446
Schedule of movement of valuation allowance | ​
​ | ​ | ​ | ​ | ​
​ |  | Six months ended June 30,
​ |  | 2021 |  | 2022
​ | ​ | (HK$ in thousands)
Balance at beginning of the year/period | ​ | 67,769 |  | 169,422
Additions | ​ | 52,234 |  | 58,939
Reversals | ​ | (748) |  | (57,639)
Balance at end of the year/period | ​ | 119,255 |  | 170,722
| ​
​ | ​ | ​ | ​ | ​
​ |  | Nine months ended September 30,
​ |  | 2021 |  | 2022
​ | ​ | (HK$ in thousands)
Balance at beginning of the period | ​ | 67,768 |  | 169,422
Additions | ​ | 92,445 |  | 89,878
Reversals | ​ | (669) |  | (121,649)
Balance at end of the period | ​ | 159,544 |  | 137,651

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32639-109319 + Details
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- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32537-109319 + Details
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