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Income Tax (Tables)

12 Months Ended

Dec. 31, 2021

The major components of income tax expense were as follows:

	Year Ended December 31
	2019			2020			2021
	NT$			NT$			NT$
	(In Millions)
Current tax
Current tax expenses recognized for the year	$	8,109		$	8,172		$	8,490
Income tax on unappropriated earnings		(20	)		8			181
Income tax adjustments on prior years		(91	)		(22	)		(150	)
Others		12			19			7
		8,010			8,177			8,528
Deferred tax
Deferred tax expense (benefits) recognized for the year		(63	)		(81	)		489
Income tax adjustments on prior years		(1	)		26			3
		(64	)		(55	)		492
Income tax expense recognized in profit or loss	$	7,946		$	8,122		$	9,020

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

	Year Ended December 31
	2019			2020			2021
	NT$			NT$			NT$
	(In Millions)
Income before income tax	$	41,867		$	42,826		$	46,067
Income tax expense calculated at the statutory rate	$	8,373		$	8,565		$	9,213
Nondeductible income and expenses in determining taxable income		18			15			8
Unrecognized loss carryforwards		7			4			(1	)
Tax-exempt income		(148	)		(367	)		(30	)
Income tax on unappropriated earnings		(20	)		8			181
Investment credits		(203	)		(131	)		(217	)
Effect of different tax rates of group entities operating in other jurisdictions		(9	)		10			(10	)
Income tax adjustments on prior years		(92	)		4			(147	)
Others		20			14			23
Income tax expense recognized in profit or loss	$	7,946		$	8,122		$	9,020

Income tax recognized in other comprehensive income

	Year Ended December 31
	2019		2020		2021
	NT$		NT$		NT$
	(In Millions)
Deferred tax
Remeasurement on defined benefit pension plans	$	305	$	239	$	78
Exchange differences arising from the translation of the foreign operations		—		—		—
Total income tax expense recognized in other comprehensive income	$	305	$	239	$	78

Current tax assets and liabilities

	December 31
	2020		2021
	NT$		NT$
	(In Millions)
Current tax assets
Tax refund receivable (included in other current assets - others)	$	1	$	5
Current tax liabilities
Income tax payable	$	6,157	$	6,530

Deferred income tax assets and liabilities

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

For the year ended December 31, 2019

	January 1, 2019		Recognized in Profit or Loss			Recognized in Other Comprehensive Income			December 31, 2019
	NT$		NT$			NT$			NT$
	(In Millions)
Deferred income tax assets
Temporary differences
Defined benefit pension plans	$	2,307	$	32		$	(305	)	$	2,034
Share of profit or loss of associates and joint ventures accounted for using equity method		389		13			—			402
Allowance for doubtful receivables over quota		435		(31	)		—			404
Valuation loss on inventory		88		53			—			141
Deferred revenue		111		(13	)		—			98
Estimated warranty liabilities		26		8			—			34
Valuation loss on financial instruments		5		8			—			13
Others		178		(73	)		—			105
		3,539		(3	)		(305	)		3,231
Loss carryforwards		41		(13	)		—			28
	$	3,580	$	(16	)	$	(305	)	$	3,259

	January 1, 2019			Recognized in Profit or Loss		Recognized in Other Comprehensive Income		December 31, 2019
	NT$			NT$		NT$		NT$
	(In Millions)
Deferred income tax liabilities
Temporary differences
Defined benefit pension plans	$	(1,832	)	$	74	$	—	$	(1,758	)
Land value incremental tax		(95	)		—		—		(95	)
Deferred revenue for award credits		(31	)		2		—		(29	)
Unrealized foreign exchange gain, net		(1	)		—		—		(1	)
Intangible assets		(32	)		3		—		(29	)
Others		(1	)		1		—		—
	$	(1,992	)	$	80	$	—	$	(1,912	)

For the year ended December 31, 2020

	January 1, 2020		Acquired by business combinations (Note 14)		Recognized in Profit or Loss			Recognized in Other Comprehensive Income			December 31, 2020
	NT$		NT$		NT$			NT$			NT$
	(In Millions)
Deferred income tax assets
Temporary differences
Defined benefit pension plans	$	2,034	$	1	$	20		$	(239	)	$	1,816
Share of profit or loss of associates and joint ventures accounted for using equity method		402		—		(1	)		—			401
Allowance for doubtful receivables over quota		404		—		(39	)		—			365
Valuation loss on inventory		141		3		155			—			299
Deferred revenue		98		—		(25	)		—			73
Estimated warranty liabilities		34		—		2			—			36
Valuation loss on financial instruments		13		—		20			—			33
Others		105		2		(17	)		—			90
		3,231		6		115			(239	)		3,113
Loss carryforwards		28		—		(8	)		—			20
	$	3,259	$	6	$	107		$	(239	)	$	3,133

	January 1, 2020			Acquired by business combinations (Note 14)			Recognized in Profit or Loss			Recognized in Other Comprehensive Income		December 31, 2020
	NT$			NT$			NT$			NT$		NT$
	(In Millions)
Deferred income tax liabilities
Temporary differences
Defined benefit pension plans	$	(1,758	)	$	—		$	(54	)	$	—	$	(1,812	)
Land value incremental tax		(95	)		—			—			—		(95	)
Deferred revenue for award credits		(29	)		—			(1	)		—		(30	)
Unrealized foreign exchange gain, net		(1	)		—			1			—		—
Intangible assets		(29	)		—			2			—		(27	)
Others		—			(3	)		—			—		(3	)
	$	(1,912	)	$	(3	)	$	(52	)	$	—	$	(1,967	)

For the year ended December 31, 2021

	January 1, 2021		Recognized in Profit or Loss			Recognized in Other Comprehensive Income			December 31, 2021
	NT$		NT$			NT$			NT$
	(In Millions)
Deferred income tax assets
Temporary differences
Defined benefit pension plans	$	1,816	$	6		$	(78	)	$	1,744
Share of profit or loss of associates and joint ventures accounted for using equity method		401		—			—			401
Allowance for doubtful receivables over quota		365		(100	)		—			265
Valuation loss on inventory		299		(102	)		—			197
Deferred revenue		73		(24	)		—			49
Estimated warranty liabilities		36		7			—			43
Valuation loss on financial instruments		33		(33	)		—			—
Others		90		(15	)		—			75
		3,113		(261	)		(78	)		2,774
Loss carryforwards		20		(9	)		—			11
	$	3,133	$	(270	)	$	(78	)	$	2,785

	January 1, 2021			Recognized in Profit or Loss			Recognized in Other Comprehensive Income		December 31, 2021
	NT$			NT$			NT$		NT$
	(In Millions)
Deferred income tax liabilities
Temporary differences
Defined benefit pension plans	$	(1,812	)	$	(157	)	$	—	$	(1,969	)
Land value incremental tax		(95	)		—			—		(95	)
Deferred revenue for award credits		(30	)		(25	)		—		(55	)
Unrealized foreign exchange gain, net		—			(26	)		—		(26	)
Intangible assets		(27	)		3			—		(24	)
Valuation gain on financial instruments		—			(16	)		—		(16	)
Others		(3	)		(1	)		—		(4	)
	$	(1,967	)	$	(222	)	$	—	$	(2,189	)

Items for which no deferred income tax assets have been recognized

As of December 31, 2021 unused loss carryforwards were as follows:

Remaining Creditable Amount		Expiry Year
NT$ (In Millions)
$	1	2022
	1	2023
	1	2024
	18	2025
	10	2026
	3	2027
	1	2028
	2	2029
	2	2030
	2	2031
$	41