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Income tax expense/(credit) | 12 Months Ended
--- | ---
Dec. 31, 2022
Income tax expense/(credit) |
Income tax expense/(credit) |
9 | Income tax expense/(credit)
See accounting policy in note 36(F).
(a) | Taxation in the consolidated statements of profit or loss represents:
|  | 2022 |  |  | 2021 |  |  | 2020 |
|  | $ |  |  | $ |  |  | $ |
Current tax - Hong Kong Profits Tax |  |  |  |  |  |  |  |  |  |  |  |
Provision for the year |  |  | 7,338,274 |  |  |  | 1,164,222 |  |  |  | — |
Current tax - Overseas |  |  |  |  |  |  |  |  |  |  |  |
Provision for the year |  |  | 88,463 |  |  |  | 38,475 |  |  |  | 19,671 |
Deferred tax |  |  |  |  |  |  |  |  |  |  |  |
Origination and reversal of temporary differences |  |  | (279,633 | ) |  |  | 2,530,047 |  |  |  | (1,957,229 | )
Tax expense/(credit) |  |  | 7,147,104 |  |  |  | 3,732,744 |  |  |  | (1,937,558 | )
Notes:
(i) | The provision for Hong Kong Profits Tax is calculated by applying the estimated annual effective tax rate of 16.5% for years ended December 31, 2022 and 2021, except for one subsidiary of the Group which is a qualifying corporation under the two-tiered Profits Tax rate regime. No provision has been made for Hong Kong Profits Tax for the year ended December 31, 2020 as the subsidiary in Hong Kong had unutilized tax loss to set-off against taxable income.
(ii) | Pursuant to the income tax rules and regulations of the United Kingdom, the applicable corporate tax is calculated at 19% of the estimated taxable profits. No provision had been made as these subsidiaries had unutilized tax loss to set-off against taxable income or had sustained losses for taxation purposes for the year ended December 31, 2022, 2021 and 2020.
The Finance Act 2021 was enacted on June 10, 2021 and include d an increase in the corporate tax rate to 25% which will be effective from April 1, 2023. As a result, the deferred tax assets and liabilities as at December 31, 2021 and 2022 that are expected to be crystalized after April 1, 2023 are calculated using the rate of 25%.
(iii) | Taxation for other overseas subsidiaries and branch is charged at the appropriate current rates of taxation ruling in the relevant countries.
(b) | Reconciliation of effective tax rate:
|  | 2022 |  |  | 2021 |  |  | 2020 |
|  | $ |  |  | $ |  |  | $ |
Loss before taxation |  |  | (183,306,283 | ) |  |  | (170,284,098 | ) |  |  | (3,901,443 | )
Notional tax on loss before taxation, calculated at the applicable rate |  |  | (18,117,948 | ) |  |  | (6,622,976 | ) |  |  | (697,772 | )
Tax effect of non-deductible expenses |  |  | 25,595,035 |  |  |  | 11,587,117 |  |  |  | 1,111,877 |
Tax effect of non-taxable income |  |  | (168,565 | ) |  |  | (1,008,915 | ) |  |  | (76,874 | )
Tax effect of temporary difference not recognized |  |  | — |  |  |  | — |  |  |  | 73,833 |
Tax effect on utilization of previously unrecognized tax losses |  |  | — |  |  |  | (579,657 | ) |  |  | (692,350 | )
Tax effect of tax losses not recognized |  |  | 101,854 |  |  |  | — |  |  |  | 298,651 |
Tax effect of previously unrecognized temporary differences recognized in current year |  |  | (263,272 | ) |  |  | 360,922 |  |  |  | (1,957,229 | )
Others |  |  | — |  |  |  | (3,747 | ) |  |  | 2,306 |
|  |  | 7,147,104 |  |  |  | 3,732,744 |  |  |  | (1,937,558 | )
(c) | Movement in deferred tax balances:
The components of deferred tax (assets)/liabilities recognized in the consolidated statement of financial position and the movements during the years ended December 31, 2020, 2021 and 2022 are as follows:
|  | Depreciation allowances in excess of the related depreciation |  |  | Tax losses recognized |  |  | Intangible assets arising from business combination |  |  | Total |
|  | $ |  |  | $ |  |  | $ |  |  | $ |
Deferred tax arising from: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
At January 1, 2020 |  |  | 36,504 |  |  |  | (1,169,865 | ) |  |  | 1,133,361 |  |  |  | — |
Charged/(credited) to profit or loss |  |  | 315,514 |  |  |  | (2,138,179 | ) |  |  | (134,564 | ) |  |  | (1,957,229 | )
Exchange differences |  |  | 12,727 |  |  |  | (39,709 | ) |  |  | 33,057 |  |  |  | 6,075 |
At December 31, 2020 and January 1, 2021 |  |  | 364,745 |  |  |  | (3,347,753 | ) |  |  | 1,031,854 |  |  |  | (1,951,154 | )
Charged to profit or loss |  |  | 906,775 |  |  |  | 1,528,881 |  |  |  | 94,391 |  |  |  | 2,530,047 |
Exchange differences |  |  | (3,839 | ) |  |  | 9,710 |  |  |  | (4,968 | ) |  |  | 903 |
At December 31, 2021 and January 1, 2022 |  |  | 1,267,681 |  |  |  | (1,809,162 | ) |  |  | 1,121,277 |  |  |  | 579,796 |
(Credited)/charged to profit or loss |  |  | (957,459 | ) |  |  | 1,799,103 |  |  |  | (1,121,277 | ) |  |  | (279,633 | )
Additions from acquisition (note 33(C)) |  |  | 63,666 |  |  |  | (235,879 | ) |  |  | 2,850,000 |  |  |  | 2,677,787 |
Exchange differences |  |  | (38,448 | ) |  |  | 2,489 |  |  |  | — |  |  |  | (35,959 | )
At December 31, 2022 |  |  | 335,440 |  |  |  | (243,449 | ) |  |  | 2,850,000 |  |  |  | 2,941,991 |
|  |  |  |  |  |  |  | 2022 |  |  | 2021 |
|  |  |  |  |  |  |  | $ |  |  | $ |
Represented by: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deferred tax assets |  |  |  |  |  |  |  |  |  |  | (243,449 | ) |  |  | (79,702 | )
Deferred tax liabilities |  |  |  |  |  |  |  |  |  |  | 3,185,440 |  |  |  | 659,498 |
|  |  |  |  |  |  |  |  |  |  | 2,941,991 |  |  |  | 579,796 |
(d) | Unrecognized deferred tax assets
The Group has not recognized deferred tax assets in respect of cumulative tax losses of $62,586,553 (2021: nil; 2020: $ 3,050,828) as it is not probable that future taxable profits against which the losses can be utilized will be available in the relevant tax jurisdictions and entities. The expiry dates of the cumulative tax losses are as follows:
|  | 2022 |  |  | 2021 |
|  | $ |  |  | $ |
Within 1 year |  |  | 893,511 |  |  |  | — |
Over 1 year but within 5 years |  |  | 14,362,136 |  |  |  | — |
Over 5 years but within 10 years |  |  | 25,085,050 |  |  |  | — |
Do not expire under the relevant tax legislations |  |  | 22,245,856 |  |  |  | — |
|  |  | 62,586,553 |  |  |  | — |

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