XML 107 R46.htm IDEA: XBRL DOCUMENT

Income Taxes

12 Months Ended

Dec. 31, 2019

Income tax expense (benefit) [Abstract]

Income Taxes

41.

Income Taxes

(1)

Income tax expense (benefit) for the years ended December 31, 2017, 2018 and 2019 are as follows:


		2017			2018			2019
		In millions of won
Current income tax expense
Payment of income tax	￦		881,583			378,715			538,223
Adjustment in respect of prior years due to change in estimate			4,484			(195,648	)		(176,441	)
Current income tax directly recognized in equity			(56,098	)		101,528			(53,302	)
Effect of change in accounting policy			—			1,780			—

			829,969			286,375			308,480

Deferred tax expense
Generation and realization of temporary differences			1,283,012			(495,658	)		(636,984	)
Changes of unrecognized tax losses, tax credit and temporary differences for prior periods			44,573			(28,509	)		(22,469	)
Changes in deferred tax on tax losses carryforwards			—			(572,305	)		(582,011	)
Tax credit carryforwards			15,270			(16,224	)		(71,306	)
Amount due to change in tax rate or regulations			—			—			1,987

			1,342,855			(1,112,696	)		(1,310,783	)

Income tax expense (benefit)	￦		2,172,824			(826,321	)		(1,002,303	)

(2)

Reconciliation between actual income tax expense and amount computed by applying the statutory tax rate to income before income taxes for the years ended December 31, 2017, 2018 and 2019 are as follows:


		2017			2018			2019
		In millions of won
Profit (loss) before income tax	￦		3,614,218			(2,000,819	)		(3,265,838	)

Income tax expense (benefit) computed at applicable tax rate(*1)			874,641			(550,225	)		(898,105	)
Adjustments
Effect of applying gradual tax rate			(5,082	)		(1,408	)		10,362
Effect of non-taxable income			(32,032	)		(1,705	)		(9,990	)
Effect of non-deductible expenses			15,032			40,151			12,197
Effect of tax losses that are not recognized as deferred tax asset			—			2,086			57,490
Effects of tax credits and deduction			(161,069	)		(39,471	)		(76,983	)
Recognition (reversal) of unrecognized deferred tax asset, net			44,573			(28,509	)		(22,469	)
Effect of change in deferred tax due to change in tax rate			1,055,154			261			16,848
Deferred tax related to investments in subsidiaries and associates			394,145			(52,618	)		147,598
Others, net			(17,022	)		765			(62,810	)

			1,293,699			(80,448	)		72,243
Adjustment in respect of prior years due to change in estimate			4,484			(195,648	)		(176,440	)

Income tax expense (benefit)	￦		2,172,824			(826,321	)		(1,002,302	)

Effective tax rate			60	%		(*2	)		(*2	)

(*1)

Applicable tax rate is 24.2% as of December 31, 2017, and 27.5% as of December 31, 2018 and 2019.

(*2)

The effective tax rate for the year ended December 31, 2018 and 2019 is not calculated for income tax benefit.

(3)

Income tax directly adjusted to shareholders’ equity (except for accumulated other comprehensive income (loss)) for the years ended December 31, 2017, 2018 and 2019 are as follows:


		2017			2018		2019
		In millions of won
Dividends of hybrid bond	￦		5,248			4,273		3,432
Effect of change in effective tax rate			(25	)		—		—

	￦		5,223			4,273		3,432

(4)

Income tax recognized as other comprehensive income (loss) for the years ended December 31, 2017, 2018 and 2019 are as follows:


		2017			2018			2019
		In millions of won
Income tax recognized as other comprehensive income (loss)
Gain (loss) on valuation of financial assets at fair value through other comprehensive income	￦		—			35,798			(4,217	)
Loss on valuation of available-for-sale financial assets			(2,551	)		—			—
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax			(11,016	)		6,639			(15,642	)
Remeasurement of defined benefit obligations			(80,645	)		53,703			(40,235	)
Investments in associates			8,649			6,592			4,275
Others			24,242			(5,477	)		(914	)

	￦		(61,321	)		97,255			(56,733	)

(5)

Changes in deferred tax assets (liabilities) recognized in the statements of financial position for the years ended December 31, 2018 and 2019 are as follows:


		2018
		Beginning balance			Amounts recognized in profit or loss			Amount recognized in other comprehensive income (loss)			Amounts recognized directly in equity		Ending balance
		In millions of won
Deferred tax on temporary differences
Employee benefits	￦		498,694			42,144			53,703			—		594,541
Cash flow hedge			65,445			(32,623	)		6,639			—		39,461
Investments in associates or subsidiaries			(8,668,016	)		(5,447	)		6,592			—		(8,666,871	)
Property, plant and equipment			(6,860,440	)		337,662			—			—		(6,522,778	)
Finance lease			(426,949	)		(26,125	)		—			—		(453,074	)
Intangible assets			7,648			(1,593	)		—			—		6,055
Financial assets at fair value through profit or loss			890			(871	)		—			—		19
Financial assets at fair value through other comprehensive income			(8,843	)		(1,379	)		35,798			—		25,576
Deferred revenue			230,711			(10,969	)		—			—		219,742
Provisions			4,822,833			(21,887	)		—			—		4,800,946
Doubtful receivables			59			—			—			—		59
Other finance liabilities			32,755			2,465			—			4,273		39,493
Gains or losses on foreign exchange translation			(1,354	)		28,434			—			—		27,080
Allowance for doubtful accounts			42,931			15,825			—			—		58,756
Accrued income			(1,825	)		(1,089	)		—			—		(2,914	)
Special deduction for property, plant and equipment			(200,927	)		(10,819	)		—			—		(211,746	)
Reserve for research and human development			(3,041	)		3,041			—			—		—
Others			952,754			105,869			(5,477	)		—		1,053,146

			(9,516,675	)		422,638			97,255			4,273		(8,992,509	)

Deferred tax on unused tax losses and tax credit
Unused tax losses			—			554,457			—			—		554,457
Excess of donation limit			—			17,848			—			—		17,848
Tax credit			20,431			16,225			—			—		36,656

			20,431			588,530			—			—		608,961

	￦		(9,496,244	)		1,011,168			97,255			4,273		(8,383,548	)


		2019
		Beginning balance			Amounts recognized in profit or loss			Amount recognized in other comprehensive income (loss)			Amounts recognized directly in equity			*Others()**			Ending balance
		In millions of won
Deferred tax on temporary differences
Employee benefits	￦		594,541			94,541			(40,235	)		—			—			648,847
Cash flow hedge			39,461			(23,977	)		(15,642	)		(841	)		—			(999	)
Investments in associates or subsidiaries			(8,666,871	)		(3,131	)		4,275			—			—			(8,665,727	)
Property, plant and equipment			(6,522,778	)		(592,440	)		—			—			—			(7,115,218	)
Finance lease			(453,074	)		292,631			—			—			—			(160,443	)
Intangible assets			6,055			(20,232	)		—			—			(41,729	)		(55,906	)
Financial assets at fair value through profit or loss			19			322			—			—			—			341
Financial assets at fair value through other comprehensive income			25,576			(3,114	)		(4,217	)		—			—			18,245
Deferred revenue			219,742			(6,739	)		—			—			—			213,003
Provisions			4,800,946			655,973			—			—			—			5,456,919
Doubtful receivables			59			—			—			—			—			59
Other finance liabilities			39,493			(4,402	)		—			4,273			—			39,364
Gains or losses on foreign exchange translation			27,080			30,881			—			—			—			57,961
Allowance for doubtful accounts			58,756			(1,149	)		—			—			—			57,607
Accrued income			(2,914	)		(1,462	)		—			—			—			(4,376	)
Special deduction for property, plant and equipment			(211,746	)		(3,627	)		—			—			—			(215,373	)
Others			1,053,146			290,484			(914	)		—			—			1,342,716

			(8,992,509	)		704,559			(56,733	)		3,432			(41,729	)		(8,382,980	)

Deferred tax on unused tax losses and tax credit
Unused tax losses			554,457			557,356			—			—			—			1,111,813
Excess of donation limit			17,848			18,847			—			—			—			36,695
Tax credit			36,656			70,870			—			—			—			107,526

			608,961			647,073			—			—			—			1,256,034

	￦		(8,383,548	)		1,351,632			(56,733	)		3,432			(41,729	)		(7,126,946	)

(*)

‘Others’ include amount changed due to business combination. (see Note 51)

(6)

Deferred tax assets (liabilities) recognized in the statements of financial position as of December 31, 2018 and 2019 are as follows:


		2018			2019
		In millions of won
Deferred tax assets	￦		1,233,761			1,437,829
Deferred tax liabilities			(9,617,309	)		(8,564,775	)

	￦		(8,383,548	)		(7,126,946	)

(7)

Details of deductible temporary differences, tax losses and unused tax credits for which no deferred tax assets were recognized as of December 31, 2018 and 2019 are as follows:

2018

2019

In millions of won

Deductible temporary differences

￦

442,391

541,449