Income Tax (Tables)

12 Months Ended

Dec. 31, 2017

The major components of income tax expense were as follows:

	Year Ended December 31
	2015			2016			2017
	NT$			NT$			NT$
	(In Millions)
Current tax
Current tax expenses recognized for the year	$	8,570		$	6,736		$	7,996
Tax on unappropriated earnings		821			(346	)		(60	)
Income tax adjustments on prior years		(83	)		(22	)		(2	)
Others		15			15			10
		9,323			6,383			7,944
Deferred tax
Deferred tax expense recognized for the year		(222	)		1,404			(101	)
Income tax adjustments on prior years		—			—			6
		(222	)		1,404			(95	)

Income tax recognized in profit or loss	$	9,101		$	7,787		$	7,849

Reconciliation of accounting profit and income tax expense was as follows:

	Year Ended December 31
	2015			2016			2017
	NT$			NT$			NT$
	(In Millions)
Income before income tax	$	51,953		$	49,413		$	48,009
Income tax expense calculated at the statutory rate (17%)	$	8,832		$	8,400		$	8,162
Nondeductible revenues and expenses in determining taxable income		28			5			34
Imputed income on tax		—			—			—
Unrecognized deductible temporary differences		11			(9	)		(1	)
Unrecognized loss carryforwards		83			12			10
Tax-exempt income		(183	)		(25	)		(87	)
Income tax on unappropriated earnings		821			(346	)		(60	)
Investment credits		(329	)		(234	)		(212	)
Effect of different tax rates of group entities operating in other jurisdictions		(94	)		(8	)		(2	)
Income tax adjustments on prior years		(83	)		(22	)		4
Others		15			14			1
Income tax expense recognized in profit or loss	$	9,101		$	7,787		$	7,849

Income tax expense (benefit) recognized in other comprehensive income

	Year Ended December 31
	2015			2016			2017
	NT$			NT$			NT$
				(In Millions)
Deferred tax
Unrealized gain or loss on available-for-sale financial assets	$	2		$	(2	)	$	(3	)
Remeasurement on defined benefit plan		(39	)		(347	)		(344	)
Total income tax benefit recognized in other comprehensive income	$	(37	)	$	(349	)	$	(347	)

Current tax assets and liabilities

	December 31
	2016		2017
	NT$		NT$
	(In Millions)
Current tax assets
Tax refund receivable (included in other current assets - other)	$	5	$	2
Current tax liabilities
Income tax payable	$	6,522	$	8,674

Deferred income tax assets and liabilities

The movements of deferred income tax assets and liabilities were as follows:

For the year ended December 31, 2015

	January 1, 2015		Recognized in Profit or Loss			Recognized in Other Comprehensive Income		From Business Combination		December 31, 2015
	NT$		NT$			NT$		NT$		NT$
	(In Millions)
Deferred Income Tax Assets
Temporary differences
Defined benefit obligation	$	1,096	$	71		$	39	$	—	$	1,206
Share of the profit of associates and joint ventures accounted for using equity method		277		48			—		—		325
Allowance for doubtful receivables over quota		114		55			—		—		169
Impairment loss on property, plant and equipment		32		12			—		—		44
Deferred revenue		156		(20	)		—		—		136
Valuation loss on inventory		41		(8	)		—		—		33
Estimated warranty liabilities		19		(1	)		—		—		18
Unrealized foreign exchange loss, net		—		18			—		—		18
Accrued award credits liabilities		28		(6	)		—		—		22
Property, plant and equipment		—		—			—		2		2
Others		34		6			—		—		40
		1,797		175			39		2		2,013
Loss carryforwards		29		17			—		2		48
	$	1,826	$	192		$	39	$	4	$	2,061

	January 1, 2015			Recognized in Profit or Loss			Recognized in Other Comprehensive Income			From Business Combination			December 31, 2015
	NT$			NT$			NT$			NT$			NT$
	(In Millions)
Deferred Income Tax Liabilities
Temporary differences
Defined benefit obligation	$	—		$	(1	)	$	—		$	—		$	(1	)
Land value incremental tax		(95	)		—			—			—			(95	)
Intangible assets		—			1			—			(44	)		(43	)
Deferred revenue for award credits		(5	)		3			—			—			(2	)
Valuation gain or loss on financial instruments, net		(3	)		—			(2	)		—			(5	)
Unrealized foreign exchange gain, net		(29	)		28			—			—			(1	)
Others		—			(1	)		—			—			(1	)
	$	(132	)	$	30		$	(2	)	$	(44	)	$	(148	)

For the year ended December 31, 2016

	January 1, 2016		Recognized in Profit or Loss			Recognized in Other Comprehensive Income		December 31, 2016
	NT$		NT$			NT$		NT$
	(In Millions)
Deferred Income Tax Assets
Temporary differences
Defined benefit obligation	$	1,206	$	(179	)	$	347	$	1,374
Share of profits of associates and joint ventures accounted for using equity method		325		5			—		330
Allowance for doubtful receivables over quota		169		61			—		230
Impairment loss on property, plant and equipment		44		78			—		122
Deferred revenue		136		(19	)		—		117
Valuation loss on inventory		33		(13	)		—		20
Estimated warranty liabilities		18		1			—		19
Unrealized foreign exchange loss, net		18		(18	)		—		—
Accrued award credits liabilities		22		(2	)		—		20
Property, plant and equipment		2		—			—		2
Others		40		(6	)		—		34
		2,013		(92	)		347		2,268
Loss carryforwards		48		6			—		54
	$	2,061	$	(86	)	$	347	$	2,322

	January 1, 2016			Recognized in Profit or Loss			Recognized in Other Comprehensive Income		December 31, 2016
	NT$			NT$			NT$		NT$
	(In Millions)
Deferred Income Tax Liabilities
Temporary differences
Defined benefit obligation	$	(1	)	$	(1,268	)	$	—	$	(1,269	)
Land value incremental tax		(95	)		—			—		(95	)
Intangible assets		(43	)		3			—		(40	)
Deferred revenue for award credits		(2	)		(44	)		—		(46	)
Valuation gain or loss on financial instruments, net		(5	)		—			2		(3	)
Unrealized foreign exchange gain, net		(1	)		(9	)		—		(10	)
Others		(1	)		—			—		(1	)
	$	(148	)	$	(1,318	)	$	2	$	(1,464	)

For the year ended December 31, 2017

	January 1, 2017		Recognized in Profit or Loss			Recognized in Other Comprehensive Income		December 31, 2017
	NT$		NT$			NT$		NT$
	(In Millions)
Deferred Income Tax Assets
Temporary differences
Defined benefit obligation	$	1,374	$	5		$	344	$	1,723
Share of profits of associates and joint ventures accounted for using equity method		330		1			—		331
Allowance for doubtful receivables over quota		230		59			—		289
Impairment loss on property, plant and equipment		122		(10	)		—		112
Deferred revenue		117		(11	)		—		106
Valuation loss on inventory		20		3			—		23
Estimated warranty liabilities		19		3			—		22
Unrealized foreign exchange loss, net		—		17			—		17
Accrued award credits liabilities		20		(5	)		—		15
Trade-in right		—		15			—		15
Property, plant and equipment		2		—			—		2
Others		34		(5	)		—		29
		2,268		72			344		2,684
Loss carryforwards		54		(8	)		—		46
	$	2,322	$	64		$	344	$	2,730

	January 1, 2017			Recognized in Profit or Loss			Recognized in Other Comprehensive Income		December 31, 2017
	NT$			NT$			NT$		NT$
	(In Millions)
Deferred Income Tax Liabilities
Temporary differences
Defined benefit obligation	$	(1,269	)	$	4		$	—	$	(1,265	)
Land value incremental tax		(95	)		—			—		(95	)
Intangible assets		(40	)		1			—		(39	)
Deferred revenue for award credits		(46	)		17			—		(29	)
Valuation gain or loss on financial instruments, net		(3	)		(1	)		3		(1	)
Unrealized foreign exchange gain, net		(10	)		10			—		—
Others		(1	)		—			—		(1	)
	$	(1,464	)	$	31		$	3	$	(1,430	)

Items for which no deferred income tax assets have been recognized

	December 31
	2016		2017
	NT$		NT$
	(In Millions)
Loss carryforwards
Expire in 2018	$	126	$	126
Expire in 2019		138		138
Expire in 2020		42		42
Expire in 2021		13		9
Expire in 2022		1		11
Expire in 2023		1		—
Expire in 2024		—		—
Expire in 2025		14		13
Expire in 2026		—		—
Expire in 2027		—		2
	$	335	$	341
Deductible temporary differences	$	3	$	2

Information about unused loss carryforwards

As of December 31, 2017, unused loss carryforwards was as follows:

Remaining Creditable Amount		Expiry Year
NT$ (In Millions)
$	126	2018
	138	2019
	45	2020
	20	2021
	12	2022
	1	2023
	4	2024
	28	2025
	10	2026
	3	2027
$	387

Imputation credit account

	December 31
	2016
	NT$
	(In Millions)
Balance of Imputation Credit Account (“ICA”)	$	7,691