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Taxation (Tables)

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Schedule of Current and Deferred Portions of Income Tax Expense

The current and deferred portions of income tax expense included in the consolidated statements of operations are as follows:

		Years ended December 31,
(In thousands)		2012				2013				2014
Current income tax expenses			2,362				175				397
Deferred income tax benefits			(123	)			(822	)			(1,856	)
Taxation for the year			2,239				(647	)			(1,459	)

Summary of Aggregate Amount and Per Share Effect of Tax Holiday

The aggregate amount and per share effect of the tax holiday are as follows:

		Years ended December 31,
		2012				2013				2014
Aggregate dollar effect (in thousands)			2,073				4,638				2,784
Per share effect—basic			0.03				0.08				0.01
Per share effect—diluted			0.03				0.06				0.01

Reconciliation of Total Tax (Benefit) Expense

The reconciliation of total tax (benefit) / expense computed by applying the respective statutory income tax rates to pre-tax (loss) / income is as follows:

		Years ended December 31,
(In thousands)		2012				2013				2014
Income tax (benefit) / expense at PRC statutory rate (based on statutory tax rate applicable to enterprises in Shenzhen, China)			655				2,433				2,129
Effects of differences in tax rates in different jurisdictions applicable to entities of the Group outside of the PRC			2,074				667				(838	)
Non-deductible expenses			53				102				714
Effect of Super Deduction available to Shenzhen Xunlei			(2,274	)			(1,763	)			(1,365	)
Effect of tax holiday			(2,073	)			(4,638	)			(2,784	)
Change in valuation allowance of deferred tax assets			6				—				291
Effect on deferred tax assets due to change in tax rates			(437	)			1,764				(103	)
Outside basis difference arising from VIE and its subsidiaries in the PRC			4,217				713				478
Expiration of tax loss			—				31				51
Others			18				44				(32	)
Income tax expense / (benefit)			2,239				(647	)			(1,459	)

Summary of Changes in Deferred Tax Asset and Liability Balances

The tax effects of temporary differences that give rise to the deferred tax asset and liability balances at December 31, 2013 and 2014 are as follows:

(In thousands)		December 31, 2013				December 31, 2014
Deferred tax assets, current portion:
Net operating loss carried forward (Note a)			50				315
Amortization of intangible assets arising from intragroup transactions (Note b)			69				69
Amortization of content copyrights (Note c)			1,033				1,675
Impairment of online game licenses			33				32
Deferred tax assets, current portion, net			1,185				2,091
Deferred tax assets, non-current portion:
Net operating loss carried forward (Note a)			3,676				6,103
Allowance for doubtful accounts			1,311				796
Amortization of intangible assets arising from intragroup transactions (Note b)			175				105
Impairment of online game licenses			49				16
Amortization of Content Copyrights (Note c)			4,219				4,133
Valuation allowance			—				(291	)
Deferred tax assets, non-current portion, net			9,430				10,862
Deferred tax liability, non-current portion:
Outside basis difference (Note d)			(8,074	)			(8,552	)

Note a: As of December 31, 2014, the Group had tax loss carryforwards of USD 24,509 thousand, which can be carried forward to offset future taxable income. The net operating tax loss carryforwards will begin to expire as follows:

(In thousands)
2015			1,259
2016			1,784
2017			1,971
2018			9,638
2019 and thereafter			9,857
			24,509

Note b: Before 2008, Giganology Shenzhen sold several self-developed software at a market valuation of approximately RMB42 million to Shenzhen Xunlei. Shenzhen Xunlei was entitled to capitalize the amounts as intangible assets for tax purposes and the respective amortization charges could be entitled to claim tax deduction. As a result, this transaction had created a temporary difference between the accounting base (on a group basis) and the tax base (on Shenzhen Xunlei standalone basis) and led to origination of a deferred tax asset.

Note c: As mentioned in Note 2(m), the Group adopts certain accelerated amortization methods for amortization of certain Content Copyrights for accounting purposes, while straight- line method is adopted for PRC tax reporting. Accordingly, the differences have led to origination of temporary differences.

Note d: The deferred tax liabilities arising from the aggregate retained earnings and reserves of the VIE and its subsidiaries that are expected to be recovered by Giganology Shenzhen and other affiliates of the Group in the future periods, amounted to USD 32,296 thousand and USD 34,210 thousand as of December 31, 2013 and 2014, respectively.

Summary of Net Operating Tax Loss Carryforwards

The net operating tax loss carryforwards will begin to expire as follows:

(In thousands)
2015			1,259
2016			1,784
2017			1,971
2018			9,638
2019 and thereafter			9,857
			24,509

Schedule of Movement of Valuation Allowance

Movement of valuation allowance is as follows:

		Years ended December 31,
(In thousands)		2012				2013				2014
Beginning balance			(37	)			(43	)			—
Additions			(6	)			—				(291	)
Write-off			—				43				—
Ending balance			(43	)			—				(291	)

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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.

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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.

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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 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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Tabular disclosure of valuation allowances to reduce deferred tax assets to net realizable value, including identification of the deferred tax asset more likely than not will not be fully realized and the corresponding amount of the valuation allowance.

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