The Company and its subsidiaries are subject to taxation in various jurisdictions including Hong Kong and PRC. Pursuant to the rules and regulations of the Cayman Islands, the Company is not subject to any income tax in the Cayman Islands. The income of its subsidiaries which are incorporated in the BVI is not subject to taxation in the BVI under the current BVI law. The subsidiaries operating in Hong Kong and the PRC are subject to income taxes as described below.

Uncertain tax positions of all PRC subsidiaries (former and existing) have been also assessed and in the opinion of the independent tax advisor, there are no significant uncertain tax positions including those transactions in between the PRC subsidiaries and their holding companies being subject to transfer pricing rulings in the PRC.

 

The Company recognizes interest expense and penalties related to income tax matters in interest and penalties expense within income tax expense. The sum of accrued interest or penalties accrued on the consolidated balance sheets accumulated to HK$2,061 on the consolidated balance sheets as at December 31, 2016. The Company had no significant unrecognized tax benefits at December 2016 and December 2017.

As of December 31, 2016 and 2017, board of directors considered that the Company had accounted for the uncertain tax positions affecting its consolidated financial position, results of operations or cash flows, and will continue to evaluate for any uncertain position in future. The Company’s tax positions related to open tax years are subject to examination by the relevant tax authorities.

 

The provision for income taxes consists of the following:

 

		Year ended December 31,			Year ended December 31,			Year ended December 31,
		2015			2016			2017
		HK$			HK$			HK$
Current tax
- Hong Kong			62			81			144
- PRC			-			118			-
- Other countries			232			1,042			380
			294			1,241			524

Reconciliations between the provision for income taxes computed by applying the Hong Kong profits tax to income before income tax expense are as follows:

 

		Year ended December 31,			Year ended December 31,			Year ended December 31,
		2015			2016			2017
		HK$			HK$			HK$
Provision for income taxes at Hong Kong profits tax rate			(4,349)			(69)			(208)
Current tax in other jurisdictions			232			1,160			380
Effect of income not chargeable for tax purpose			(90)			(152)			(2,732)
Effect of expenses not deductible for tax purpose			4,401			-			1,289
Tax effect of unused tax losses not recognized			-			221			1,795
Under provision in previous years			100			81			-
			294			1,241			524