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Taxation (Tables)

12 Months Ended

Dec. 31, 2019

Taxation

Schedule of (Loss) income before provision for income taxes is attributable to the geographic locations

		As of December 31,
		2017		2018		2019
		RMB		RMB		RMB
Cayman		(2,479)		(74)		13,620
Hong Kong SAR		(134)		7,042		(2,490)
BVI		(1)		(18)		(2)
PRC, excluding Hong Kong SAR		5,629		101,509		(517,749)
		3,015		108,459		(506,621)

Schedule of components of income tax expense

		For the Year Ended
		December 31,
		2017		2018		2019
		RMB		RMB		RMB
Current income tax expense		3,277		6,540		2,588
Deferred income tax (benefit)		(911)		(2,107)		1,178
		2,366		4,433		3,766

Schedule of reconciliation of actual income tax expense reported in the Consolidated Statements of Comprehensive Income (Loss) and amount computed by applying the PRC statutory income tax rate of 25% to income before income taxes

		For the Year Ended
		December 31,
		2017		2018		2019
		RMB		RMB		RMB
Income/(loss) before tax		3,015		108,459		(506,621)
Income tax computed at PRC statutory tax rate		754		27,115		(126,655)
Tax rate differential not subject to PRC income tax		631		(576)		(3,193)
Non-deductible expense		4,147		2,245		151,990
Effect of preferential tax rate (Note*)		(3,102)		(5,153)		47,979
Change in valuation allowance		3,348		(8,651)		(56,920)
Additional deduction for research and development expenses		(3,412)		(8,732)		(9,700)
Tax-exempted income		—		(2,306)		(1,440)
Late payment surcharge on uncertain tax position		—		544		1,321
Other		—		(53)		384
		2,366		4,433		3,766

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Note* Shenzhen Fangdd enjoys a preferential income tax rate of 15% from 2014 to 2019 if all the criteria for HNTE status could be satisfied in the relevant year. Please refer to Note 13 – a) PRC section for details. Shenzhen Fangdd will renew the HNTE  status in 2020 and believes that it will obtain the HNTE status for an additional period of 3 years from 2020 to 2022.

Schedule of tax effects of temporary differences that give rise to the deferred income tax assets and liabilities

		As of December 31,
		2018		2019
		RMB		RMB
Net operating loss carry forward		142,793		71,588
Allowance for doubtful accounts		17,208		27,229
Payroll and accrued expenses		2,148		2,898
Deductible advertisement expenses		158		94
Long-term equity investment impairment		—		2,400
Total deferred tax assets		162,307		104,209
Less: Valuation allowance		(153,840)		(96,920)
Deferred tax assets		8,467		7,289

Schedule of movements of the valuation allowance

		For the Year Ended
		December 31,
		2017		2018		2019
		RMB		RMB		RMB
Balance at the beginning of the year		(159,143)		(162,491)		(153,840)
Changes of valuation allowances		(3,348)		8,651		56,920
Balance at the end of the year		(162,491)		(153,840)		(96,920)

Schedule of reconciliation of the beginning and ending amount of total unrecognized tax benefits

		For the Year Ended
		December 31,
		2017		2018		2019
		RMB		RMB		RMB
Beginning balance		(812)		(3,697)		(12,646)
(Additions)/deduction		(2,885)		(8,949)		736
Ending balance		(3,697)		(12,646)		(11,910)

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