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Income Tax (Tables)
 12 Months Ended
Dec. 31, 2020
Text Block [Abstract]  
Summary of Income Tax Expense
Income tax expense consisted of the following:
 
   
Years Ended December 31
 
   
2018
   
2019
   
2020
 
   
NT$
   
NT$
   
NT$
 
   
(In Millions)
   
(In Millions)
   
(In Millions)
 
Current income tax expense
      
Current tax expense recognized in the current year
  $60,584.3   $47,135.5   $87,452.7 
Income tax adjustments on prior years
   (21,753.0)    (10,193.8)    (7,589.4) 
Other income tax adjustments
   152.9    (41.5)    150.2 
  
 
 
   
 
 
   
 
 
 
   38,984.2    36,900.2    80,013.5 
  
 
 
   
 
 
   
 
 
 
Deferred income tax benefit
      
Effect of tax rate changes
   (1,474.8)    —    — 
The origination and reversal of temporary differences
   (3,072.5)    (1,065.1)    (6,275.2) 
  
 
 
   
 
 
   
 
 
 
   (4,547.3)    (1,065.1)    (6,275.2) 
  
 
 
   
 
 
   
 
 
 
Income tax expense recognized in profit or loss
  $34,436.9   $35,835.1   $73,738.3 
  
 
 
   
 
 
   
 
 
 
Reconciliation of Income before Income Tax and Income Tax Expense Recognized in Profit or Loss
A reconciliation of inc
o
me before income tax and income tax expense recognized in profit or loss was as follows:
 
   
Years Ended December 31
 
   
2018
   
2019
   
2020
 
   
NT$
   
NT$
   
NT$
 
   
(In Millions)
   
(In Millions)
   
(In Millions)
 
Income before tax
  $397,543.1   $389,862.1   $584,746.3 
  
 
 
   
 
 
   
 
 
 
Income tax expense at the statutory rate
  $80,872.5   $79,056.5   $118,831.3 
Tax effect of adjusting items:
      
Nondeductible (deductible) items in determining taxable income
   2,533.4    (4,183.5)    1,015.9 
Tax-exempt
income
   (54,543.5)    (39,808.1)    (65,988.1) 
Additional income tax under the Alternative Minimum Tax Act
   21,455.9    10,367.9    18,872.8 
Additional income tax on unappropriated earnings
   16,294.5    7,628.1    14,747.3 
Effect of tax rate changes on deferred income tax
   (1,474.8)    —    — 
The origination and reversal of temporary differences
   (3,072.6)    (1,065.1)    (6,275.2) 
Income tax credits
   (6,028.4)    (5,925.4)    (26.5) 
  
 
 
   
 
 
   
 
 
 
   56,037.0    46,070.4    81,177.5 
Income tax adjustments on prior years
   (21,753.0)    (10,193.8)    (7,589.4) 
Other income tax adjustments
   152.9    (41.5)    150.2 
  
 
 
   
 
 
   
 
 
 
Income tax expense recognized in profit or loss
  $34,436.9   $35,835.1   $73,738.3 
  
 
 
   
 
 
   
 
 
 
Income Tax Expense Recognized in Other Comprehensive Income
 b.
Income tax expense recognized in other comprehensive income
 
   
Years Ended December 31
 
   
2018
   
2019
   
2020
 
   
NT$
   
NT$
   
NT$
 
   
(In Millions)
   
(In Millions)
   
(In Millions)
 
Deferred income tax benefit (expense)
      
Related to remeasurement of defined benefit obligation
  $103.3   $(30.4)   $422.1 
Related to unrealized gain/loss on investments in equity instruments at FVTOCI
   91.8    9.4    0.6 
Related to gain/loss on cash flow hedges
   0.6    —    — 
  
 
 
   
 
 
   
 
 
 
  $195.7   $(21.0)   $422.7 
  
 
 
   
 
 
   
 
 
 
Analysis of Deferred Income Tax Assets and Liabilities in Consolidated Statements of Financial Position
The analysis of deferred income tax assets and liabilities was as follows:
 
   
December 31,

2019
   
December 31,

2020
 
   
NT$
   
NT$
 
   
(In Millions)
   
(In Millions)
 
Deferred income tax assets
    
Temporary differences
    
Depreciation
  $13,547.2   $19,354.4 
Refund liability
   2,150.4    3,755.1 
Net defined benefit liability
   1,016.3    1,342.1 
Unrealized loss on inventories
   469.4    858.5 
Deferred compensation cost
   323.1    330.3 
Investments in equity instruments at FVTOCI
   65.7    66.3 
Others
   356.3    251.5 
  
 
 
   
 
 
 
  $17,928.4   $25,958.2 
  
 
 
   
 
 
 
Deferred income tax liabilities
    
Temporary differences
    
Unrealized exchange gains
   (333.6)    (866.5) 
Others
   (10.8)    (863.4) 
  
 
 
   
 
 
 
  $(344.4)   $(1,729.9) 
  
 
 
   
 
 
 
 
  
Year Ended December 31, 2018
 
 
  
 
 
 
Recognized in
 
 
 
 
  
 
 
 
  
Balance,
Beginning of
Year
 
 
Profit or Loss
 
 
Other
Comprehensive
Income
 
 
Effect of
Exchange Rate
Changes
 
  
Balance,

End of Year
 
 
  
NT$
 
 
NT$
 
 
NT$
 
 
NT$
 
  
NT$
 
 
  
(In Millions)
 
 
(In Millions)
 
 
(In Millions)
 
 
(In Millions)
 
  
(In Millions)
 
Deferred income tax assets
  
   
 
   
 
   
 
   
  
   
Temporary differences
  
   
 
   
 
   
 
   
  
   
Depreciation
  
$
8,401.3
 
 
$
3,430.4
 
 
$
—
 
 
$
7.5
 
  
$
11,839.2
 
Refund liability
  
 
1,637.7
 
 
 
955.0
 
 
 
—
 
 
 
1.3
 
  
 
2,594.0
 
Net defined benefit liability
  
 
975.3
 
 
 
6.3
 
 
 
103.3
 
 
 
—
 
  
 
1,084.9
 
Unrealized loss on inventories
  
 
629.5
 
 
 
120.5
 
 
 
—
 
 
 
1.0
 
  
 
751.0
 
Deferred compensation cost
  
 
266.5
 
 
 
(4.7
) 
 
 
—
 
 
 
9.9
 
  
 
271.7
 
Investments in equity instruments at FVTOCI
  
 
—
 
 
 
—
 
 
 
56.2
 
 
 
—
 
  
 
56.2
 
Others
  
 
195.2
 
 
 
7.1
 
 
 
—
 
 
 
7.1
 
  
 
209.4
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
      
 
  
$
12,105.5
 
 
$
4,514.6
 
 
$
159.5
 
 
$
26.8
 
  
$
16,806.4
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
Deferred income tax liabilities
  
   
 
   
 
   
 
   
  
   
Temporary differences
  
   
 
   
 
   
 
   
  
   
Unrealized exchange gains
  
$
(169.5
) 
 
$
107.8
 
 
$
—
 
 
$
—
 
  
$
(61.7
) 
Investments in equity instruments at FVTOCI
  
 
(95.4
) 
 
 
—
 
 
 
95.4
 
 
 
—
 
  
 
—
 
Others
  
 
(37.3
) 
 
 
(75.1
) 
 
 
(59.2
) 
 
 
—
 
  
 
(171.6
) 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
      
 
  
$
(302.2
) 
 
$
32.7
 
 
$
36.2
 
 
$
—
 
  
$
(233.3
) 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
  
Year Ended December 31, 2019
 
 
  
 
 
 
Recognized in
 
 
 
 
 
 
 
 
  
Balance,
Beginning of
Year
 
 
Profit or Loss
 
 
Other
Comprehensive
Income
 
 
Effect of
Exchange Rate
Changes
 
 
Balance,

End of Year
 
 
  
NT$
 
 
NT$
 
 
NT$
 
 
NT$
 
 
NT$
 
 
  
(In Millions)
 
 
(In Millions)
 
 
(In Millions)
 
 
(In Millions)
 
 
(In Millions)
 
Deferred income tax assets
  
   
 
   
 
   
 
   
 
   
Temporary differences
  
   
 
   
 
   
 
   
 
   
Depreciation
  
$
11,839.2
 
 
$
1,727.8
 
 
$
—
 
 
$
(19.8
) 
 
$
13,547.2
 
Refund liability
  
 
2,594.0
 
 
 
(443.2
) 
 
 
—
 
 
 
(0.4
) 
 
 
2,150.4
 
Net defined benefit liability
  
 
1,084.9
 
 
 
(38.2
) 
 
 
(30.4
) 
 
 
—
 
 
 
1,016.3
 
Unrealized loss on inventories
  
 
751.0
 
 
 
(280.8
) 
 
 
—
 
 
 
(0.8
) 
 
 
469.4
 
Deferred compensation cost
  
 
271.7
 
 
 
59.4
 
 
 
—
 
 
 
(8.0
) 
 
 
323.1
 
Investments in equity instruments at FVTOCI
  
 
56.2
 
 
 
0.1
 
 
 
9.4
 
 
 
—
 
 
 
65.7
 
Others
  
 
209.4
 
 
 
151.1
 
 
 
—
 
 
 
(4.2
) 
 
 
356.3
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      
 
  
$
16,806.4
 
 
$
1,176.2
 
 
$
(21.0
) 
 
$
(33.2
) 
 
$
17,928.4
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred income tax liabilities
  
   
 
   
 
   
 
   
 
   
Temporary differences
  
   
 
   
 
   
 
   
 
   
Unrealized exchange gains
  
$
(61.7
) 
 
$
(271.9
) 
 
$
—
 
 
$
—
 
 
$
(333.6
) 
Others
  
 
(171.6
) 
 
 
160.8
 
 
 
—
 
 
 
—
 
 
 
(10.8
) 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      
 
  
$
(233.3
) 
 
$
(111.1
) 
 
$
—
 
 
$
—
 
 
$
(344.4
) 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
Year Ended December 31, 2020
 
 
  
 
 
 
Recognized in
 
  
 
 
 
 
 
 
  
Balance,
Beginning of
Year
 
 
Profit or Loss
 
 
Other
Comprehensive
Income
 
  
Effect of
Exchange Rate
Changes
 
 
Balance,

End of Year
 
 
  
NT$
 
 
NT$
 
 
NT$
 
  
NT$
 
 
NT$
 
 
  
(In Millions)
 
 
(In Millions)
 
 
(In Millions)
 
  
(In Millions)
 
 
(In Millions)
 
Deferred income tax assets
  
   
 
   
 
   
  
   
 
   
Temporary differences
  
   
 
   
 
   
  
   
 
   
Depreciation
  
$
13,547.2
 
 
$
5,824.0
 
 
$
—
 
  
$
(16.8
) 
 
$
19,354.4
 
Refund liability
  
 
2,150.4
 
 
 
1,606.1
 
 
 
—
 
  
 
(1.4
) 
 
 
3,755.1
 
Net defined benefit liability
  
 
1,016.3
 
 
 
(96.3
) 
 
 
422.1
 
  
 
—
 
 
 
1,342.1
 
Unrealized loss on inventories
  
 
469.4
 
 
 
391.1
 
 
 
—
 
  
 
(2.0
) 
 
 
858.5
 
Deferred compensation cost
  
 
323.1
 
 
 
27.4
 
 
 
—
 
  
 
(20.2
) 
 
 
330.3
 
Investments in equity instruments at FVTOCI
  
 
65.7
 
 
 
—
 
 
 
0.6
 
  
 
—
 
 
 
66.3
 
Others
  
 
356.3
 
 
 
(91.6
) 
 
 
—
 
  
 
(13.2
) 
 
 
251.5
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
      
 
  
$
17,928.4
 
 
$
7,660.7
 
 
$
422.7
 
  
$
(53.6
) 
 
$
25,958.2
 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Deferred income tax liabilities
  
   
 
   
 
   
  
   
 
   
Temporary differences
  
   
 
   
 
   
  
   
 
   
Unrealized exchange gains
  
$
(333.6
) 
 
$
(532.9
) 
 
$
—
 
  
$
—
 
 
$
(866.5
) 
Others
  
 
(10.8
) 
 
 
(852.6
) 
 
 
—
 
  
 
—
 
 
 
(863.4
) 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
      
 
  
$
(344.4
) 
 
$
(1,385.5
) 
 
$
—
 
  
$
—
 
 
$
(1,729.9
) 
 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
Tax-exemption Information Related to Profits Generated from Certain Projects
As of December 31, 2020, the profits generated from the following projects of TSMC are exempt from income tax for a five-year period:
 
 
  
Tax-exemption Period
Construction and expansion of 2009 by TSMC
  
2018 to 2022