Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

(1)	Income tax expense (benefit) for the years ended December 31, 2020, 2021 and 2022 are as follows:


		2020			2021			2022

		In millions of won
Current income tax expense
Payment of income tax	￦		671,179			357,767			563,681
Adjustment in respect of prior years due to change in estimate			(63,756	)		153,113			48,374
Current income tax directly recognized in equity			51,486			(198,714	)		(350,348	)

			658,909			312,166			261,707

Deferred tax expense (benefit)
Generation and realization of temporary differences			(77,985	)		(489,411	)		(564,801	)
Reclassified from equity to profit (loss)			—			—			(4,964	)
Changes of unrecognized tax losses, tax credit and temporary differences for prior periods			(10,471	)		(43,653	)		(38,708	)
Changes in deferred tax on tax losses carryforwards			296,070			(1,641,823	)		(9,175,755	)
Tax credit carryforwards			32,541			(12,199	)		34,019
Amount due to change in tax rate or regulations			—			18,931			73,991

			240,155			(2,168,155	)		(9,676,218	)

Income tax expense (benefit)	￦		899,064			(1,855,989	)		(9,414,511	)

Summary of Reconciliation Between Actual Income Tax Expense and Amount Computed by Applying the Statutory Tax Rate

(2)	Reconciliation between actual income tax expense (benefit) and amount computed by applying the statutory tax rate to profit (loss) before income taxes for the years ended December 31, 2020, 2021 and 2022 are as follows:


		2020			2021			2022

		In millions of won
Profit (loss) before income tax	￦		2,991,533			(7,071,570	)		(33,843,619	)

Income tax expense (benefit) computed at applicable tax rate (*1)			822,672			(1,944,682	)		(9,306,995	)
Adjustments
Effect of applying gradual tax rate			(10,362	)		(10,362	)		(10,362	)
Effect of non-taxable income			(13,593	)		(4,983	)		(9,471	)
Effect of non-deductible expenses			46,776			78,814			39,663
Effect of tax losses that are not recognized as deferred tax asset			—			1,351			19,275
Effects of tax credits and deduction			(63,753	)		(43,931	)		(98,684	)
Reversal of unrecognized deferred tax asset, net			(10,471	)		(43,641	)		(38,708	)
Effect of change in deferred tax due to change in tax rate			(17,590	)		18,931			393,416
Deduction of deferred tax assets			55,682			73,887			(85,514	)
Deferred tax related to investments in subsidiaries, associates and joint ventures			102,137			(135,878	)		(375,064	)
Others, net			51,322			1,392			9,559

			140,148			(64,420	)		(155,890	)
Adjustment in respect of prior years due to change in estimate			(63,756	)		153,113			48,374

Income tax expense (benefit)	￦		899,064			(1,855,989	)		(9,414,511	)

Effective tax rate			30.05	%		(*2	)		(*2	)

(*1)

Applicable tax rate is 27.5% as of December 31, 2020, 2021 and 2022.

(*2)

The effective tax rate for the year ended December 31, 2020 is

30.05

% and the effective tax rate for the years ended December 31, 2021 and 2022 is not calculated due to income tax benefit.

Summary of Income Tax Directly Adjusted to Shareholders' Equity (Except for Accumulated Other Comprehensive Income (Loss))

(3)	Income tax directly adjusted to equity (except for accumulated other comprehensive income (loss)) for the years ended December 31, 2020, 2021 and 2022 are as follows:


		2020		2021		2022

		In millions of won
Dividends of hybrid bond	￦		4,273		4,736		4,149
Disposal of subsidiaries			—		—		406

	￦		4,273		4,736		4,555

Summary of Income Tax Recognized as Other Comprehensive Income (Loss)

(4)	Income tax recognized as other comprehensive income (loss) for the years ended December 31, 2020, 2021 and 2022 are as follows:


		2020			2021			2022

		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	￦		19,447			(9,753	)		(31,416	)
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax			(47,231	)		24,220			40,390
Remeasurement of defined benefit liability			14,971			(126,890	)		(322,489	)
Investments in associates			35,714			(53,672	)		(66,677	)
Others			24,312			(37,355	)		25,289

	￦		47,213			(203,450	)		(354,903	)

Summary of Changes in Deferred Income Tax Assets (Liabilities)

(5)	Changes in deferred tax assets (liabilities) recognized in the consolidated statements of financial position for the years ended December 31, 2021 and 2022 are as follows:


		2021
		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	￦		689,787			(4,514	)		(126,890	)		—		558,383
Cash flow hedge			15,587			(90,217	)		24,220			463		(49,947	)
Investments in subsidiaries, associates and joint ventures			(8,668,015	)		367			(53,672	)		—		(8,721,320	)
Property, plant and equipment			(7,713,449	)		282,988			—			—		(7,430,461	)
Finance lease			(211,420	)		(204,138	)		—			—		(415,558	)
Intangible assets			(31,166	)		(315	)		—			—		(31,481	)
Financial assets at fair value through profit or loss			13			(1	)		—			—		12
Financial assets at fair value through other comprehensive income			37,950			(816	)		(9,753	)		—		27,381
Deferred revenue			199,701			(13,310	)		—			—		186,391
Provisions			5,916,803			577,511			—			—		6,494,314
Doubtful receivables			—			801			—			—		801
Other finance liabilities			30,399			(3,262	)		—			4,273		31,410
Gains or losses on foreign exchange translation			(11,635	)		103,046			—			—		91,411
Allowance for doubtful accounts			56,129			8,135			—			—		64,264
Accrued income			8,944			1,058			—			—		10,002
Special deduction for property, plant and equipment			(226,351	)		2,224			—			—		(224,127	)
Others			1,505,951			(22,769	)		(37,355	)		—		1,445,827

			(8,400,772	)		636,788			(203,450	)		4,736		(7,962,698	)

Deferred tax on unused tax losses and tax credit
Unused tax losses			893,074			1,666,803			—			—		2,559,877
Excess of donation limit			35,181			34,004			—			—		69,185
Tax credit			105,416			29,274			—			—		134,690

			1,033,671			1,730,081			—			—		2,763,752

	￦		(7,367,101	)		2,366,869			(203,450	)		4,736		(5,198,946	)


		2022
		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	￦		558,383			(36,341	)		(322,489	)		—		199,553
Cash flow hedge			(49,947	)		(46,188	)		40,390			405		(55,340	)
Investments in subsidiaries, associates and joint ventures			(8,721,320	)		410,310			(66,677	)		—		(8,377,687	)
Property, plant and equipment			(7,430,461	)		(111,177	)		—			—		(7,541,638	)
Finance lease			(415,558	)		9,919			—			—		(405,639	)
Intangible assets			(31,481	)		6,550			—			—		(24,931	)
Financial assets at fair value through profit or loss			12			3,445			—			—		3,457
Financial assets at fair value through other comprehensive income			27,381			25,178			(31,416	)		—		21,143
Deferred revenue			186,391			(16,411	)		—			—		169,980
Provisions			6,494,314			595,030			—			—		7,089,344
Doubtful receivables			801			1,673			—			—		2,474
Other finance liabilities			31,410			(14,142	)		—			4,150		21,418
Gains or losses on foreign exchange translation			91,411			42,905			—			—		134,316
Allowance for doubtful accounts			64,264			(6,029	)		—			—		58,235
Accrued income			10,002			6,612			—			—		16,614
Special deduction for property, plant and equipment			(224,127	)		8,968			—			—		(215,159	)
Others			1,445,827			16,456			25,289			—		1,487,572

			(7,962,698	)		896,758			(354,903	)		4,555		(7,416,288	)

Deferred tax on unused tax losses and tax credit
Unused tax losses			2,559,877			9,102,228			—			—		11,662,105
Excess of donation limit			69,185			11,861			—			—		81,046
Tax credit			134,690			15,719			—			—		150,409

			2,763,752			9,129,808			—			—		11,893,560

	￦		(5,198,946	)		10,026,566			(354,903	)		4,555		4,477,272

Summary of Deferred Income Tax Assets (Liabilities)

(6)	Deferred tax assets (liabilities) recognized in the consolidated statements of financial position as of December 31, 2021 and 2022 are as follows:


		2021			2022

		In millions of won
Deferred tax assets	￦		1,901,992			10,934,375
Deferred tax liabilities			(7,100,938	)		(6,457,103	)

	￦		(5,198,946	)		4,477,272

Summary of Deductible Temporary Differences, Tax Losses and Unused Tax Credits for Which No Deferred Income Tax Assets Were Recognized

(7)	Details of deductible temporary differences, tax losses and unused tax credits for which no deferred tax assets were recognized as of December 31, 2021 and 2022 are as follows:


		2021		2022

		In millions of won
Deductible temporary differences	￦		1,539,980		1,381,532