XML 46 R26.htm IDEA: XBRL DOCUMENT
v3.22.1

TAXATION | 12 Months Ended
--- | ---
Dec. 31, 2021
Income Tax Disclosure [Abstract] |
TAXATION | 20. TAXATION (a) Value added tax (“VAT”) and surcharges The Group is subject to statutory VAT rate of 11% prior to May 1, 2018, 10% between May 1, 2018 and April 1, 2019, and 9% since April 1, 2019 for revenues from sales of agricultural products, and 17% prior to May 1, 2018 and 16% between May 1, 2018 and April 1,2019, and 13% since April 1,2019 for sales of other products, respectively, in the PRC. The Group is exempted from VAT for revenues from sales of vegetables and contraceptives. The Group is subject to VAT at the rate of 11% prior to May 1, 2018, 10% between May 1, 2018 and April 1, 2019, and 9% since April 1,2019 for the logistics services. (b) Income tax Cayman Islands Under the current laws of the Cayman Islands, the Company and its subsidiaries incorporated in the Cayman Islands are not subject to tax on income or capital gain. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders. Hong Kong Under the current Hong Kong Inland Revenue Ordinance, the subsidiaries of the Group incorporated in Hong Kong are subject to 8.25% profit tax on the first HKD2 million taxable income and 16.5% profit tax on the remaining taxable income generated from operations in Hong Kong. Additionally, payments of dividends by the subsidiaries incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax. China On March 16, 2007, the National People’s Congress of PRC enacted a new Enterprise Income Tax Law (“new EIT law”), under which Foreign Investment Enterprises (“FIEs”) and domestic companies would be subject to enterprise income tax at a uniform rate of 25%. The new EIT law became effective on January 1, 2008. In accordance with the implementation rules of EIT Law, a qualified “High and New Technology Enterprise” (“HNTE”) is eligible for a preferential tax rate of 15%. The HNTE certificate is effective for a period of three years. An entity could re-apply for the HNTE certificate when the prior certificate expires. Zhejiang Jishang Preferred E-Commerce Co., Ltd. (“Jishang Preferred”) obtained its HNTE certificate on November 30, 2018 and was eligible to enjoy a preferential tax rate of 15 % from 2018 to 2020 to the extent it has taxable income under the EIT Law, as long as it maintains the HNTE qualification and duly conducts relevant EIT filing procedures with the relevant tax authority. From July 2019, Jishang Preferred started to function as a procurement company within the Group and is no longer qualified as an HNTE so as not able to enjoy a preferential tax rate of 15% since 2019. Jixiang obtained its HNTE certificate on December 16, 2021 and was eligible to enjoy a preferential tax rate of 15% from 2021 to 2023 to the extent it has taxable income under the EIT Law, as long as it maintains the HNTE qualification and duly conducts relevant EIT filing procedures with the relevant tax authority. The Group’s other PRC subsidiaries, VIEs and VIEs’ subsidiaries are subject to the statutory income tax rate of 25%. According to relevant laws and regulations promulgated by the State Administration of Tax of the PRC effective from 2008 onwards, enterprises engaging in research and development activities are entitled to claim 150% of their qualified research and development expenses so incurred as tax deductible expenses when determining their assessable profits for the year (‘Super Deduction’). The additional deduction of 50% of qualified research and development expenses can only be claimed directly in the annual EIT filing and subject to the approval from the relevant tax authorities. Effective from 2018 onwards, enterprises engaging in research and development activities are entitled to claim 175% of their qualified research and development expenses so incurred as tax deductible expenses. The additional deduction of 75% of qualified research and development expenses can be directly claimed in the annual EIT filing. Withholding tax on undistributed dividends The new EIT Law also provides that an enterprise established under the laws of a foreign country or region but whose “actual management body” is located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at the rate of 25% for its global income. The Implementing Rules of the EIT Law merely define the location of the “actual management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, property, etc., of a non-PRC company is located.” Based on a review of surrounding facts and circumstances, the Group does not believe that it is likely that its operations outside of the PRC should be considered a resident enterprise for PRC tax purposes. However, due to limited guidance and implementation history of the EIT Law, there is uncertainty as to the application of the EIT Law. Should the Company be treated as a resident enterprise for PRC tax purposes, the Company will be subject to PRC income tax on worldwide income at a uniform tax rate of 25%. Withholding tax on undistributed dividends (continued) The new EIT law also imposes a withholding income tax of 10% on dividends distributed by an FIE to its immediate holding company outside of China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. According to the arrangement between Mainland China and Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion in August 2006, dividends paid by an FIE in China to its immediate holding company in Hong Kong will be subject to withholding tax at a rate of no more than 5% if the foreign investor owns directly at least 25% of the shares of the FIE and if Hong Kong company is a beneficial owner of the dividend. The State Taxation Administration (“SAT”) further promulgated SAT Public Notice [2018] No.9 regarding the assessment criteria on beneficial owner status. As of December 31, 2020 and 2021, the Group does not have any plan to require its PRC subsidiaries to distribute their retained earnings and intends to retain them to operate and expand its business in the PRC. Accordingly, no deferred income tax liabilities on withholding tax were provided as of December 31, 2020 and 2021. Composition of income tax The components of (loss)/income before tax are as follow:
|  | Year Ended December 31, 2019 |  |  | Year Ended December 31, 2020 |  |  | Year Ended December 31, 2021 |
|  | RMB |  |  | RMB |  |  | RMB |
(Loss)/income before tax |  |  |  |  |  |  |  |  |  |  |  |
(Loss)/income from PRC entities |  |  | (204,937 | ) |  |  | (5,399 | ) |  |  | 244,163 |
Income/(loss) from overseas entities |  |  | 67,604 |  |  |  | (103,161 | ) |  |  | (35,141 | )
Total (loss)/income before tax |  |  | (137,333 | ) |  |  | (108,560 | ) |  |  | 209,022 |
|  | Year Ended December 31, 2019 |  |  | Year Ended December 31, 2020 |  |  | Year Ended December 31, 2021 |
|  | RMB |  |  | RMB |  |  | RMB |
Current income tax expense |  |  | 13,300 |  |  |  | 10,458 |  |  |  | 17,803 |
Deferred income tax (benefit)/expense |  |  | (30,020 | ) |  |  | 28,840 |  |  |  | 42,698 |
Total income tax (benefit)/expense |  |  | (16,720 | ) |  |  | 39,298 |  |  |  | 60,501 |
Reconciliation of the differences between statutory tax rate and the effective tax rate Reconciliation of the differences between the statutory EIT rate applicable to losses of the consolidated entities and the income tax expenses of the Group:
|  | Year Ended December 31, 2019 |  |  | Year Ended December 31, 2020 |  |  | Year Ended December 31, 2021 |
PRC Statutory income tax rate |  |  | 25 | % |  |  | 25 | % |  |  | 25 | %
Effect on tax rates in different tax jurisdiction |  |  | 8 | % |  |  | -9 | % |  |  | 5 | %
The effect of change in the tax rate of subsidiaries |  |  | 26 | % |  |  | 0 | % |  |  | 0 | %
Non-deductible expenses |  |  | -2 | % |  |  | -1 | % |  |  | 1 | %
Additional deduction for research and development expenditures |  |  | 16 | % |  |  | 48 | % |  |  | -6 | %
Share-based compensation |  |  | -23 | % |  |  | -23 | % |  |  | 4 | %
Non-taxable income |  |  | 0 | % |  |  | 0 | % |  |  | -2 | %
Permanent book-tax differences |  |  | 2 | % |  |  | 7 | % |  |  | 4 | %
Change in valuation allowance |  |  | -40 | % |  |  | -83 | % |  |  | -2 | %
Effective tax rates |  |  | 12 | % |  |  | -36 | % |  |  | 29 | %
(c) Deferred tax assets and deferred tax liabilities The following table sets forth the significant components of the deferred tax assets:
|  | As of December 31, |
|  | 2020 |  |  | 2021 |
|  | RMB |  |  | RMB |
Deferred tax assets |  |  |  |  |  |  |  |
Net accumulated losses-carry forward |  |  | 205,487 |  |  |  | 108,667 |
Deferred membership program revenue |  |  | — |  |  |  | 212 |
Refund payable to members |  |  | 1,100 |  |  |  | 172 |
Inventory write-downs |  |  | 2,632 |  |  |  | 1,749 |
Allowance for credit losses |  |  | 3,272 |  |  |  | 2,813 |
Others |  |  | 4,101 |  |  |  | 1,021 |
Less: valuation allowance |  |  | (156,150 | ) |  |  | (96,489 | )
Total deferred tax assets |  |  | 60,442 |  |  |  | 18,145 |
|  | As of December 31, |
|  | 2020 |  |  | 2021 |
|  | RMB |  |  | RMB |
Deferred tax liabilities |  |  |  |  |  |  |  |
Gain or loss from changes in fair values |  |  | 2,684 |  |  |  | 2,572 |
Others |  |  | 135 |  |  |  | 648 |
Total deferred tax liabilities |  |  | 2,819 |  |  |  | 3,220 |
The Group offsets deferred tax assets and deferred tax liabilities relating to income taxes levied by the same tax authority on same tax payee, and presents the net amount of deferred tax assets and deferred tax liabilities on its consolidated balance sheets. The net deferred tax assets were RMB59,455 and RMB17,497 as of December 31, 2020 and 2021, respectively, and the net deferred tax liabilities were RMB 1,832 and RMB 2,572 as of December 31, 2020 and 2021, respectively. Movement of valuation allowance
|  | Year Ended December 31, 2019 |  |  | Year Ended December 31, 2020 |  |  | Year Ended December 31, 2021 |
|  | RMB |  |  | RMB |  |  | RMB |
Balance at beginning of the year |  |  | (10,004 | ) |  |  | (65,225 | ) |  |  | (156,150 | )
Changes of valuation allowance (1) |  |  | (55,221 | ) |  |  | (90,925 | ) |  |  | 59,661 |
Balance at end of the year |  |  | (65,225 | ) |  |  | (156,150 | ) |  |  | (96,489 | )
(1) | Valuation allowances have been provided against deferred tax assets when the Group determines that it is more likely than not that the deferred tax assets will not be utilized in the future. In making such determination as of December 31, 2021 , the Group evaluates a variety of factors supporting the utilization of carry-forwards through a forecast of future taxable profits for each impacted entity within a specific tax jurisdiction, including : the Group’s entities’ operating history and forecast , accumulated deficit, existence of taxable temporary differences and reversal periods. As of December 31, 2020 and 2021, valuation allowances on a large part of deferred tax assets were provided because it was more likely than not that the Group will not be able to utilize tax loss carry forwards generated by certain unprofitable subsidiaries. As of December 31, 2019 and 2020, valuation allowances of RMB 55,221 and 90,925 were provided against deferred tax assets because it was more likely than not that such portion of deferred tax will not be realized based on the Company’s estimate of future taxable incomes of all its subsidiaries.
A full valuation allowance was provided by Jixiang, a subsidiary of the Group, as of December 31, 2020 and 2021. For the year ended December 31, 2021, the changes of valuation allowance were mainly attributable to: (a) the cumulative tax losses of Jixiang decreased in 2021 due to the gain recognized from the disposal of the investment in investee A (Note 9); (b) Jixiang started to recognize deferred tax assets of cumulative tax losses at a preferental tax rate of 15% from 2021 (2020: 25%), and therefore the valuation allowance decreased accordingly. As of December 31, 2021, net operating loss carry forwards from PRC entities will expire as follows:
At December 31, |  | RMB |
2022 |  |  | 6,264 |
2023 |  |  | 484 |
2024 |  |  | 288,839 |
2025 |  |  | 227,979 |
2026 |  |  | 48,915 |
|  |  | 572,481 |
As of December 31, 2021, the Group had tax losses carry forwards of approximately RMB 572,481 which mainly arose from its subsidiaries, consolidated VIEs and VIEs’ subsidiaries established in the PRC. The tax losses carry forwards from PRC entities will expire during the period from 2022 to 2026.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration