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Income Tax (Tables)

12 Months Ended

Dec. 31, 2022

Major components of tax expense (income) [abstract]

Major Components of Income Tax Expense

The major components of income tax expense were as follows:


		Year Ended December 31
		2020				2021				2022
		NT$				NT$				NT$
		(In Millions)
Current tax
Current tax expenses recognized for the year		$	8,172			$	8,490			$	8,863
Income tax on unappropriated earnings			8				181				137
Income tax adjustments on prior years			(22	)			(150	)			(141	)
Others			19				7				7
			8,177				8,528				8,866
Deferred tax
Deferred tax expense (benefits) recognized for the year			(81	)			489				318
Income tax adjustments on prior years			26				3				151
			(55	)			492				469
Income tax recognized in profit or loss		$	8,122			$	9,020			$	9,335

Reconciliation of Accounting Profit and Income Tax Expense

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


		Year Ended December 31
		2020				2021				2022
		NT$				NT$				NT$
		(In Millions)
Income before income tax		$	42,826			$	46,067			$	47,204
Income tax expense calculated at the statutory rate		$	8,565			$	9,213			$	9,441
Nondeductible income and expenses in determining taxable income			15				8				(20	)
Tax-exempt income			(367	)			(30	)			(3	)
Income tax on unappropriated earnings			8				181				137
Investment credits			(131	)			(217	)			(207	)
Effect of different tax rates of group entities operating in other jurisdictions			10				(10	)			(31	)
Income tax adjustments on prior years			4				(147	)			10
Others			18				22				8
Income tax expense recognized in profit or loss		$	8,122			$	9,020			$	9,335

Income Tax Recognized in Other Comprehensive Income

b.

Income tax recognized in other comprehensive income


		Year Ended December 31
		2020				2021				2022
		NT$				NT$				NT$
		(In Millions)
Deferred tax
Remeasurement on defined benefit pension plans		$	239			$	78			$	231
Exchange differences arising from the translation of the foreign operations			—				—				—
Total income tax expense recognized in other comprehensive income		$	239			$	78			$	231

Current Tax Assets and Liabilities

c.

Current tax assets and liabilities


		December 31
		2021				2022
		NT$				NT$
		(In Millions)
Current tax assets
Tax refund receivable (included in other current assets - others)		$	5			$	2
Current tax liabilities
Income tax payable		$	6,530			$	6,999

Movements of Deferred Income Tax Assets and Liabilities

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

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
Allowance for doubtful receivables over quota			404				—				(39	)			—				365
Valuation loss on inventory			141				3				155				—				299
Unrealized foreign exchange loss, net			3				1				1				—				5
Estimated warranty liabilities			34				—				2				—				36
Deferred revenue			98				—				(25	)			—				73
Valuation loss on financial instruments			13				—				20				—				33
Valuation loss on onerous contracts			13				—				21				—				34
Accrued award credits liabilities			17				—				1				—				18
Share of profit or loss of associates and joint ventures accounted for using equity method			402				—				(1	)			—				401
Others			72				1				(40	)			—				33
			3,231				6				115				(239	)			3,113
Loss carryforwards			28				—				(8	)			—				20
		$	3,259			$	6			$	107			$	(239	)		$	3,133

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	)
Intangible assets			(29	)			—				2				—				(27	)
Others			(1	)			(3	)			1				—				(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
Allowance for doubtful receivables over quota			365				(100	)			—				265
Valuation loss on inventory			299				(102	)			—				197
Unrealized foreign exchange loss, net			5				(3	)			—				2
Estimated warranty liabilities			36				7				—				43
Deferred revenue			73				(24	)			—				49
Valuation loss on financial instruments			33				(33	)			—				—
Valuation loss on onerous contracts			34				(8	)			—				26
Accrued award credits liabilities			18				(9	)			—				9
Share of profit or loss of associates and joint ventures accounted for using equity method			401				—				—				401
Others			33				5				—				38
			3,113				(261	)			(78	)			2,774
Loss carryforwards			20				(9	)			—				11
		$	3,133			$	(270	)		$	(78	)		$	2,785

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	)
Intangible assets			(27	)			3				—				(24	)
Others			(3	)			(43	)			—				(46	)
		$	(1,967	)		$	(222	)		$	—			$	(2,189	)

For the year ended December 31, 2022


		January 1, 2022				Recognized in Profit or Loss				Recognized in Other Comprehensive Income				December 31, 2022
		NT$				NT$				NT$				NT$
		(In Millions)
Deferred income tax assets
Temporary differences
Defined benefit pension plans		$	1,744			$	1			$	(231	)		$	1,514
Allowance for doubtful receivables over quota			265				(81	)			—				184
Valuation loss on inventory			197				(92	)			—				105
Unrealized foreign exchange loss, net			2				56				—				58
Estimated warranty liabilities			43				4				—				47
Deferred revenue			49				(19	)			—				30
Valuation loss on financial instruments			—				24				—				24
Valuation loss on onerous contracts			26				(8	)			—				18
Accrued award credits liabilities			9				3				—				12
Share of profit or loss of associates and joint ventures accounted for using equity method			401				(399	)			—				2
Others			38				(5	)			—				33
			2,774				(516	)			(231	)			2,027
Loss carryforwards			11				159				—				170
		$	2,785			$	(357	)		$	(231	)		$	2,197

Deferred income tax liabilities
Temporary differences
Defined benefit pension plans		$	(1,969	)		$	(145	)		$	—			$	(2,114	)
Land value incremental tax			(95	)			—				—				(95	)
Deferred revenue for award credits			(55	)			(15	)			—				(70	)
Intangible assets			(24	)			4				—				(20	)
Others			(46	)			44				—				(2	)
		$	(2,189	)		$	(112	)		$	—			$	(2,301	)

Items for Which No Deferred Income Tax Assets Have Been Recognized

e.

Items for which no deferred income tax assets have been recognized


		December 31
		2021				2022
		NT$				NT$
		(In Millions)
Loss carryforwards
Expire in 2022		$	—			$	—
Expire in 2023			—				—
Expire in 2024			1				1
Expire in 2025			15				15
Expire in 2026			8				8
Expire in 2027			3				3
Expire in 2028			1				1
Expire in 2029			1				1
Expire in 2030			—				—
Expire in 2031			—				—
Expire in 2032			—				—
		$	29			$	29

Information About Unused Loss Carryforwards

As of December 31, 2022 unused loss carryforwards were as follows:


Remaining Creditable Amount				Expiry Year
NT$ (In Millions)
$	1			2023
	1			2024
	18			2025
	10			2026
	3			2027
	1			2028
	2			2029
	1			2030
	63			2031
	99			2032
$	199