Income tax expense (Tables)

12 Months Ended

Dec. 31, 2021

The major components of income tax expense for the years ended Dec

mber 31, 2019, 2020 and 2021 are as follows:


	31.12.2019			31.12.2020			31.12.2021			31.12.2021
	RMB’000			RMB’000			RMB’000			US$’000
Current income tax

- Current year		193,878			180,254			48,856			7,727
- Over provision in respect of prior years		(6,985	)		(124	)		(21,523	)		(3,404	)
Deferred tax
- Movement in temporary differences		(14,274	)		12,543			16,483			2,607
- Over provision in respect of prior years		—			(135	)		—			—

Consolidated income tax expense reported in the statement of profit or loss		172,619			192,538			43,816			6,930

Reconciliation of Income Tax Expense

Income tax expense reported in the consolidated statement of profit or loss differs from the amount computed by applying the PRC income tax rate of 15% (being tax rate of Yuchai) for the years ended December 31, 2019, 2020 and 2021 for the

following reasons:


	31.12.2019			31.12.2020			31.12.2021			31.12.2021
	RMB’000			RMB’000			RMB’000			US$’000

Accounting profit before tax		1,033,319			971,864			451,710			71,447
Computed tax expense at 15%		154,998			145,780			67,757			10,717
Adjustments resulting from:
Non-deductible expenses		3,982			9,188			17,795			2,815
Tax-exempt income		(6,171	)		(601	)		(2,181	)		(345	)
Utilization of deferred tax benefits previously not recognized		(5,076	)		(1,996	)		(29	)		(5	)
Deferred tax benefits not recognized		6,613			6,097			10,356			1,638
Tax credits for research and development expense		(31,863	)		(26,329	)		(59,633	)		(9,432	)
Tax rate differential		26,223			24,251			16,517			2,612
Over provision in respect of previous years		(6,985	)		(259	)		(21,523	)		(3,404	)
Withholding tax expense		30,898			36,332			14,639			2,315
Others		—			75			118			19

Total		172,619			192,538			43,816			6,930

Summary of Deferred Tax

Deferred tax relates t

the following:


	Consolidated statement of financial position									Consolidated statement of profit or loss
	31.12.2020			31.12.2021			31.12.2021			31.12.2019			31.12.2020			31.12.2021			31.12.2021
	RMB’000			RMB’000			US$’000			RMB’000			RMB’000			RMB’000			US$’000

Accelerated tax depreciation		(100,802	)		(138,770	)		(21,950	)		(17,366	)		(55,882	)		(37,968	)		(6,006	)
Interest receivable		(1,937	)		(3,396	)		(537	)		608			(293	)		(1,459	)		(231	)
PRC withholding tax on dividend income (i)		(112,456	)		(65,544	)		(10,367	)		(30,721	)		(36,255	)		(14,529	)		(2,298	)
Impairment of property, plant and equipment		6,210			5,138			812			(9,295	)		(438	)		(1,072	)		(170	)
Effect of change in residual value of property, plant and equipment		33,894			60,230			9,527			—			33,894			26,336			4,166
Write-down of inventories		22,628			20,250			3,203			2,343			4,225			(2,378	)		(376	)
Allowance for doubtful account receivables		8,056			6,789			1,074			4,900			(2,021	)		(1,267	)		(200	)
Accruals		298,766			283,427			44,830			46,108			48,149			(15,339	)		(2,426	)
Deferred income		108,942			97,828			15,474			12,232			1,211			(11,114	)		(1,758	)
Losses available for offsetting against future taxable income		—			23,072			3,650			—			—			23,072			3,650
Others		24,441			43,606			6,897			5,465			(4,998	)		19,235			3,042

Deferred tax benefits/(expenses)											14,274			(12,408	)		(16,483	)		(2,607	)

Net deferred tax assets		287,742			332,630			52,613

Reflected in the consolidated statement of financial position as follows:
Deferred tax assets		400,198			398,174			62,980
Deferred tax liabilities		(112,456	)		(65,544	)		(10,367	)

		287,742			332,630			52,613

(i)

The movement of PRC withholding tax on dividend income is as follows:


	31.12.2020			31.12.2021			31.12.2021
	RMB’000			RMB’000			US$’000
At January 1		(106,922	)		(112,456	)		(17,787	)
Provision made to consolidated statement of profit or loss		(36,255	)		(14,529	)		(2,298	)
Utilization		30,721			61,441			9,718

December 31		(112,456	)		(65,544	)		(10,367	)

Deferred Tax Assets That Have Not Been Recognized

Deferred tax assets have not been recognized in respect of the following items:


	31.12.2020		31.12.2021		31.12.2021
	RMB’000		RMB’000		US$’000

Unutilized tax losses		404,215		414,212		65,517
Unutilized capital allowances and investment allowances		105,622		103,810		16,420
Other unrecognized temporary differences relating to asset impairment and deferred grants		204,423		199,203		31,508

		714,260		717,225		113,445