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Income taxes
12 Months Ended
Jun. 30, 2022
Income taxes  
Income taxes

11 Income taxes

(a) Taxation recognized in consolidated profit or loss:

For the year ended June 30, 

2020

2021

 

2022

    

RMB’000

    

RMB’000

    

RMB’000

Amounts recognized in consolidated profit or loss

 

  

 

  

Current tax

 

  

 

  

Provision for the year

 

306,679

 

200,170

252,989

Deferred tax

 

  

 

Origination and reversal of temporary differences (Note 11(c))

 

(95,730)

 

13,085

14,081

Tax expense on continuing operations

 

210,949

 

213,255

267,070

1)Cayman Islands and the BVI

Pursuant to the rules and regulations of the Cayman Islands and the BVI, the Group is not subject to any income tax in the Cayman Islands and the BVI.

2)Hong Kong

Under the current Hong Kong Inland Revenue Ordinance, the Company’s Hong Kong subsidiaries are subject to Hong Kong Profits Tax at the rate of 16.5% on their taxable income generated from the operations in Hong Kong. A two-tiered profits tax rates regime was introduced in 2018 where the first HKD2 million of assessable profits earned by a company will be taxed at half of the current tax rate (8.25%) whilst the remaining profits will continue to be taxed at 16.5%. There is an anti-fragmentation measure where each group will have to nominate only one company in the Group to benefit from the progressive rates.

3)Mainland China

Under the Corporate Income Tax (“CIT”) Law, the subsidiaries established in mainland China are subject to a unified statutory CIT rate of 25%.

A subsidiary established in Hengqin New Area of Zhuhai, a pilot free trade zone in the PRC, met the criteria for a preferential income tax rate of 15%.

4)United States

Under United States Internal Revenue Code, the subsidiaries established in United States are subject to a unified Federal CIT rate of 21% and variable state income and franchise tax depends on which state the subsidiaries has nexus with. Most of subsidiaries in United States are operated in the state of California, and thus they will be subject to state income tax rate of 8.84%. Other subsidiaries in United States mainly are subject to state income tax rates ranging from 6.25% to 11.5% depending on the location of the operation.

5)Indonesia

The subsidiary incorporated in Indonesia is subject to the prevailing statutory tax rate on taxable income. In response to the COVID-19 outbreak, the statutory tax rate was progressively lowered from 25% to 22% for fiscal years ended December 31, 2020 and 2021, and remain 22% from fiscal year ending December 31, 2022 onwards.

6)India

Under the Income Tax Act 1961 enacted in India, the subsidiary incorporated in India is subject to a profit tax rate of 26%.

7)Canada

Under the Canadian federal and provincial tax rules, the subsidiaries incorporated in Canada are subject to the combined Canadian federal and provincial statutory income tax rates ranging from 23% to 31% depending on the location of the operation.

8)Singapore

Under the Income Tax Act enacted in Singapore, the subsidiaries incorporated in Singapore are subject to a tax rate of 17% on its chargeable income.

(b) Reconciliation between tax expense and accounting profit at applicable tax rates:

    

For the year ended June 30, 

2020

2021

2022

    

RMB’000

    

RMB’000

    

RMB’000

Profit/(loss) before taxation

 

80,818

(1,216,192)

 

906,813

Notional tax on profit before taxation, calculated at the rates applicable to profits in the jurisdictions concerned

 

(48,050)

118,766

 

214,704

Tax effect of share-based compensation expenses and employee compensation expenses (Note 8(i))

 

96,011

70,330

 

20,254

Tax effect of other non-deductible expenses

 

6,566

10,433

 

10,935

Tax effect of loss from waiver of intercompany receivables of discontinued operations *

 

(61,548)

 

Tax benefit from disposal of subsidiaries

 

(24,779)

 

Effect of preferential tax treatments on assessable profits of a subsidiary (Note 11(a)(3))

 

(34,876)

(34,218)

 

(18,001)

Effect of fair value changes of paid-in capital subject to redemption and other preferential rights not recognized

 

207,942

 

Tax effect of exempted and non-taxable interest income

(6,245)

(4,044)

Effect of unused tax losses not recognized

 

35,382

72,969

 

44,888

Effect of deductible temporary differences not recognized/(utilized)

 

34,301

(18,780)

 

(1,666)

Actual tax expenses

 

210,949

213,255

 

267,070

Note:

*The loss from waiver of intercompany receivables is related with the waiver of outstanding receivables due from Nome Design (Guangzhou) Co., Ltd. and Minihome Technology Co., Ltd. prior to the disposal in accordance with the share purchase agreements to sell their equity interests to Mr. Ye Guofu, the controlling shareholder of the Group.

(c) Movement in deferred tax assets

The components of deferred tax assets recognized in the consolidated statement of financial position and the movements during the reporting periods presented are as follows:

    

    

Loss from 

    

waiver of 

intercompany 

receivables 

Unused 

    

Intra-group 

of 

tax 

unrealized 

Credit loss and 

discontinued 

losses

profits

impairment

operations

Others

    

Total

    

RMB’000

    

RMB’000

    

RMB’000

    

RMB’000

    

RMB’000

    

RMB’000

Deferred tax assets arising from:

 

  

 

  

 

  

 

  

 

  

 

  

At July 1, 2020

 

28,567

 

37,709

 

50,881

 

61,548

 

4,815

 

183,520

Charged to profit or loss (continuing operations)

 

6,278

 

(22,931)

 

683

 

 

2,885

 

(13,085)

Exchange rate difference

 

(592)

 

(82)

 

(1,217)

 

 

8

 

(1,883)

At June 30, 2021

 

34,253

 

14,696

 

50,347

 

61,548

 

7,708

 

168,552

Charged to profit or loss (continuing operations)

 

(2,536)

 

(3,556)

 

(8,673)

 

 

684

 

(14,081)

Exchange rate difference

 

(21)

 

(43)

 

(101)

 

 

27

 

(138)

At June 30, 2022

 

31,696

 

11,097

 

41,573

 

61,548

 

8,419

 

154,333

The Group only recognizes deferred income tax assets for cumulative tax losses if it is probable that future taxable amounts will be available to utilize those tax losses.

(d) Unrecognized deferred tax assets

Deferred tax assets have not been recognized in respect of the following items, because it is not probable that future taxable profit against which the losses can be utilized will be available in the relevant tax jurisdiction.

    

As at June 30, 

2021

2022

    

RMB’000

    

RMB’000

Deductible temporary differences

 

127,500

 

107,964

Cumulative tax losses

 

483,437

 

630,807

Total

 

610,937

 

738,771

(e) Tax losses carried forward

Tax losses for which no deferred tax asset was recognized will expire as follows:

    

As at 

    

    

As at 

    

June 30, 

June 30, 

2021

Expiry date

2022

Expiry date

    

RMB’000

    

    

RMB’000

    

Expire

 

147,928

 

2022-2042

 

278,215

 

2023-2043

Never expire

 

335,509

 

 

352,592

 

Tax losses for which no deferred tax asset was recognized are related to subsidiaries that were established in recent years, which are not expected to derive sufficient taxable profits in the foreseeable future before unused tax losses expired.

(g) Uncertain tax position

The Group evaluates whether it is probable that tax authority will accept the tax treatment for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of June 30, 2021 and 2022, the Group did not have any significant unrecognized uncertain tax positions. The Group does not anticipate any significant increase to unrecognized tax benefit within the next 12 months. Interest and penalties related to income tax matters, if any, is included in income tax expense.