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Income tax expense

12 Months Ended

Dec. 31, 2018

The Company is a tax exempted company incorporated in the Cayman Islands. In addition, dividend payments by the Company are not subject to withholding taxes. No provision for Hong Kong Profits Tax has been made as the subsidiary incorporated in Hong Kong had no assessable profits earned or derived from Hong Kong during the years ended December 31, 2016, 2017 and 2018. Payments of dividends by Hong Kong companies are not subject to Hong Kong withholding tax. The subsidiaries incorporated in the PRC other than Hong Kong are governed by the Income Tax Law of the PRC concerning Foreign Investment and Foreign Enterprises and various local income tax laws. Dividends paid by our PRC operating subsidiaries may be subject to withholding taxes of 5%-10%. The Company does not have any deferred tax assets or liabilities as of December 31, 2016, 2017 and 2018.

	Year Ended December 31,
		2016	2017 Restated			2018
	RMB’000		RMB’000		RMB’000

Current income tax expenses		15,221		15,550		18,033
Deferred income tax expenses		-		-		-
Income tax expense		15,221		15,550		18,033

The reconciliation between tax expense and accounting profit at applicable tax rates of 25% is as follows:

	Year Ended December 31,
		2016	2017 restated			2018
	RMB’000		RMB’000		RMB’000

Income before taxation		57,169		44,376		26,188

Computed expected income tax expense		14,292		11,094		6,547
Tax effect of non-deductible expenses		929		592		17,173
Tax effect of tax-exempt entities		-		3,864		1,884
Tax effect of non-taxable income		-		-		(7,571	)
Income tax expense		15,221		15,550		18,033