Taxation (Tables)

12 Months Ended

Dec. 31, 2019

Taxation in Consolidated Statements of Comprehensive Income

(a)

Taxation in the consolidated statements of comprehensive income represents:


			2019			2018		2017
	Note		Million			Million		Million
Current tax
Provision for the PRC enterprise income tax on the estimated taxable profits for the year		(i)		36,989			34,395		36,945
Provision for Hong Kong profits tax on the estimated assessable profits for the year		(ii)		269			275		260

				37,258			34,670		37,205
Deferred tax
Origination and reversal of temporary differences, net (note 22)				(1,916	)		1,274		(3,482	)

				35,342			35,944		33,723

Note:

(i)

The provision for the PRC enterprise income tax is based on the statutory tax rate of 25% (2018: 25%; 2017: 25%) on the estimated taxable profits determined in accordance with the relevant income tax rules and regulations of the PRC for the year ended December 31, 2019. Certain subsidiaries of the Company enjoy the preferential tax rate of 15% (2018: 15%; 2017: 15%).

(ii)

The provision for Hong Kong profits tax is calculated at 16.5% (2018: 16.5%; 2017: 16.5%) of the estimated assessable profits for the year ended December 31, 2019.

(iii)

Pursuant to the “Notice regarding Matters on Determination of Tax Residence Status of Chinese-controlled Offshore Incorporated Enterprises under Rules of Effective Management” issued by SAT in 2009 (“2009 Notice”), the Company is qualified as a PRC offshore-registered resident enterprise. Accordingly, the dividend income of the Company from its subsidiaries in the PRC is exempted from PRC enterprise income tax.

Reconciliation Between Income Tax Expense and Accounting Profit at Applicable Tax Rates

(b)

Reconciliation between income tax expense and accounting profit at applicable tax rates:


	2019			2018			2017
	Million			Million			Million
Profit before taxation		142,133			153,895			148,137

Notional tax on profit before tax, calculated at the PRC’s statutory tax rate of 25% (Note)		35,533			38,474			37,034
Tax effect of non-taxable items
– Income from investments accounted for using the equity method		(3,160	)		(3,465	)		(2,487	)
– Interest and other income		(75	)		(131	)		(41	)
Tax effect of non-deductible expenses on the PRC operations		1,211			604			772
Tax effect of non-deductible expenses on Hong Kong operations		114			85			70
Rate differential of certain PRC operations (note 13(a)(i))		(930	)		(1,835	)		(2,317	)
Rate differential of Hong Kong operations (note 13(a)(ii))		(177	)		(189	)		(182	)
Tax effect of deductible temporary difference for which no deferred tax asset was recognized		668			1,414			154
Tax effect of deductible tax loss for which no deferred tax asset was recognized		2,019			1,267			818
Others		139			(280	)		(98	)

Taxation		35,342			35,944			33,723

Note: The PRC’s statutory tax rate is adopted as the majority of the Group’s operations are subject to this rate.

Tax Credited/(Charged) Relating to Components of Other Comprehensive Income

(c)

The tax (charged)/credited relating to components of other comprehensive income is as follows:


	2019									2018								2017
	Before tax Million			Tax charged Million			After tax Million			Before tax Million			Tax charged Million		After tax Million			Before tax Million			Tax credited Million		After tax Million
Change in value of available-for-sale financial assets		—			—			—			—			—		—			(7	)		2		(5	)
Changes in value of financial assets at FVOCI		(74	)		(1	)		(75	)		(168	)		—		(168	)		—			—		—
Currency translation differences		683			—			683			1,160			—		1,160			(735	)		—		(735	)
Share of other comprehensive income/(loss) of investments accounted for using the equity method		442			—			442			1,248			—		1,248			(1,038	)		—		(1,038	)

Other comprehensive income/(loss)		1,051			(1	)		1,050			2,240			—		2,240			(1,780	)		2		(1,778	)

Current tax					—									—								—
Deferred tax					(1	)								—								2

					(1	)								—								2