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, 2018, 2019 and 2020. 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, 2018, 2019 and 2020.

The Company’s income taxes consist of:	Year Ended December 31,
	2018		2019		2020
	RMB’000		RMB’000		RMB’000

Current income tax expenses		18,033		-		-
Deferred income tax expenses		-		-		-
Income tax expense		18,033		-		-

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

	Year Ended December 31,
	2018			2019			2020
	RMB’000			RMB’000			RMB’000

Profit before income tax		26,188			58,616			19,854

Computed expected income tax expense		6,547			14,654			4,963
Tax effect of non-deductible expenses		17,173			6,260			13,817
Tax effect of tax-exempt entities		1,884			716			804
Tax effect of non-taxable income		(7,571	)		(21,630	)		(19,584	)
Income tax expense		18,033			-			-