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Taxation (Tables)

12 Months Ended

Dec. 31, 2022

Taxation

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

​

​	​	​	​	​	​	​
​	​	For the Year Ended December 31,
​	​	2020	​	2021	​	2022
​		RMB		RMB		RMB
Cayman		(11,322)		(1,403)	​	(156,373)
Hong Kong SAR		(2,804)		(4,692)	​	(4,539)
BVI		(1)		(33)	​	(12)
PRC, excluding Hong Kong SAR		(192,583)		(1,187,962)	​	(71,177)
​		(206,710)		(1,194,090)	​	(232,101)

​

Schedule of components of income tax expense

​

​	​	​	​	​	​	​
​	​	For the Year Ended
​	​	December 31,
​	​	2020	​	2021	​	2022
​		RMB		RMB		RMB
Current income tax expense		12,753		5,483		7,487
Deferred income tax expense		1,912		3,424		—
​		14,665		8,907		7,487

​

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,
​	​	2020	​	2021	​	2022
​		RMB		RMB		RMB
Loss before tax		(206,710)		(1,194,090)		(232,101)
Income tax computed at PRC statutory tax rate		(51,678)		(298,523)		(58,025)
Effect of preferential tax rate*		(4,654)		68,988		(6,364)
Tax rate differential not subject to PRC income tax		3,069		758		39,482
Non-deductible expense		43,350		47,393		44,424
Change in valuation allowance		29,819		188,892		59,700
Additional deduction for research and development expenses		(6,128)		(839)		(981)
Tax-exempted income		(1,054)		(220)		(92)
Late payment surcharge on uncertain tax position		2,039		2,661		2,197
Others**		(98)		(203)	​	(72,853)
​	​	14,665	​	8,907	​	7,487

*Shenzhen Fangdd enjoys a preferential income tax rate of 15% from 2014 to 2022 if all the criteria for HNTE status could be satisfied in the relevant years. Please refer to Note 16 – a) PRC section for details.

**It was expected that Shenzhen Fangdd would not satisfy all the criteria for HNTE status in the foreseeable future years since 2023, so its enacted future income tax rate was changed from 15% to 25% when considering the deferred income tax assets.

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

​

​	​	​	​	​
​	​	As of December 31,
​		2021		2022
​		RMB		RMB
Net operating loss carry forward		100,354		103,285
Allowance for doubtful accounts		149,713		172,898
Payroll and accrued expenses		3,847		4,157
Deductible advertisement expenses		4,824		1,024
Long-term equity investment impairment		34,399		74,988
Intangible assets*	​	31,545	​	28,031
Gross deferred tax assets		324,682		384,382
Less: Valuation allowance		(324,682)		(384,382)
Net deferred tax assets		—		—

* In December 2020, Shenzhen Fangdd transferred certain internal developed software to another subsidiary of the Group at a consideration of RMB141.5 million which resulted a difference between the financial statement carrying amounts of the intangible asset and the respective tax base.

Schedule of movements of the valuation allowance

​

​	​	​	​	​	​	​
​	​	For the Year Ended
​	​	December 31,
​	​	2020	​	2021	​	2022
​		RMB		RMB		RMB
Balance at the beginning of the year		(96,920)		(135,790)		(324,682)
Changes of valuation allowances		(38,870)		(188,892)		(59,700)
Balance at the end of the year		(135,790)		(324,682)		(384,382)

​

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

​

​	​	​	​	​	​	​
​	​	For the Year Ended
​	​	December 31,
​	​	2020	​	2021	​	2022
​		RMB		RMB		RMB
Beginning balance		(11,910)		(23,840)	​	(28,575)
Additions		(11,930)		(4,735)	​	(2,197)
Ending balance		(23,840)		(28,575)	​	(30,772)

​

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