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Income Tax (Tables)

12 Months Ended

Dec. 31, 2021

Text Block [Abstract]

Summary of Income Tax Expense

Income tax expense consisted of the following:

		Years Ended December 31
		2019				2020				2021
		NT$				NT$				NT$
		(In Millions)				(In Millions)				(In Millions)
Current income tax expense
Current tax expense recognized in the current year		$	47,135.5			$	87,452.7			$	107,694.4
Income tax adjustments on prior years			(10,193.8	)			(7,589.4	)			(14,539.5	)
Other income tax adjustments			(41.5	)			150.2				152.2
			36,900.2				80,013.5				93,307.1
Deferred income tax benefit
The origination and reversal of temporary differences			(1,065.1	)			(6,275.2	)			(17,530.0	)
Investment tax credits			—				—				(5,621.7	)
			(1,065.1	)			(6,275.2	)			(23,151.7	)
Income tax expense recognized in profit or loss		$	35,835.1			$	73,738.3			$	70,155.4

Reconciliation of Income before Income Tax and Income Tax Expense Recognized in Profit or Loss

A reconciliation of income before income tax and income tax expense recognized in profit or loss was as follows:

		Years Ended December 31
		2019				2020				2021
		NT$				NT$				NT$
		(In Millions)				(In Millions)				(In Millions)
Income before tax		$	389,862.1			$	584,746.3			$	663,036.0
Income tax expense at the statutory rate		$	79,056.5			$	118,831.3			$	134,595.2
Tax effect of adjusting items:
Nondeductible (deductible) items in determining taxable income			(4,183.5	)			1,015.9				11,279.5
Tax-exempt income			(39,808.1	)			(65,988.1	)			(89,852.9	)
Additional income tax under the Alternative Minimum Tax Act			10,367.9				18,872.8				32,852.7
Additional income tax on unappropriated earnings			7,628.1				14,747.3				18,849.5
The origination and reversal of temporary differences			(1,065.1	)			(6,275.2	)			(17,530.0	)
Income tax credits			(5,925.4	)			(26.5	)			(5,651.3	)
			46,070.4				81,177.5				84,542.7
Income tax adjustments on prior years			(10,193.8	)			(7,589.4	)			(14,539.5	)
Other income tax adjustments			(41.5	)			150.2				152.2
Income tax expense recognized in profit or loss		$	35,835.1			$	73,738.3			$	70,155.4

Income Tax Expense Recognized in Other Comprehensive Income

b. Income tax expense recognized in other comprehensive income

		Years Ended December 31
		2019				2020				2021
		NT$				NT$				NT$
		(In Millions)				(In Millions)				(In Millions)
Deferred income tax benefit (expense)
Related to remeasurement of defined benefit obligation		$	(30.4	)		$	422.1			$	(29.1	)
Related to unrealized gain/loss on investments in equity instruments at FVTOCI			9.4				0.6				(56.2	)
Related to gain/loss on cash flow hedges			—				—				(3.4	)
		$	(21.0	)		$	422.7			$	(88.7	)

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, 2020				December 31, 2021
		NT$				NT$
		(In Millions)				(In Millions)
Deferred income tax assets
Temporary differences
Depreciation		$	19,354.4			$	34,720.7
Refund liability			3,755.1				5,986.2
Investment tax credits			—				5,621.7
Net defined benefit liability			1,342.1				1,237.1
Unrealized loss on inventories			858.5				899.0
Deferred compensation cost			330.3				374.0
Investments in equity instruments at FVTOCI			66.3				10.1
Others			251.5				305.1
		$	25,958.2			$	49,153.9
Deferred income tax liabilities
Temporary differences
Unrealized exchange gains		$	(866.5	)		$	(706.3	)
Others			(863.4	)			(1,167.6	)
		$	(1,729.9	)		$	(1,873.9	)

		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	)
		Year Ended December 31, 2021
						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		$	19,354.4			$	15,365.7			$	—			$	0.6			$	34,720.7
Refund liability			3,755.1				2,231.5				—				(0.4	)			5,986.2
Investment tax credits			—				5,621.7				—				—				5,621.7
Net defined benefit liability			1,342.1				(75.9	)			(29.1	)			—				1,237.1
Unrealized loss on inventories			858.5				41.0				—				(0.5	)			899.0
Deferred compensation cost			330.3				49.2				—				(5.5	)			374.0
Investments in equity instruments at FVTOCI			66.3				—				(56.2	)			—				10.1
Others			251.5				59.1				—				(5.5	)			305.1
		$	25,958.2			$	23,292.3			$	(85.3	)		$	(11.3	)		$	49,153.9
Deferred income tax liabilities
Temporary differences
Unrealized exchange gains		$	(866.5	)		$	160.2			$	—			$	—			$	(706.3	)
Others			(863.4	)			(300.8	)			(3.4	)			—				(1,167.6	)
		$	(1,729.9	)		$	(140.6	)		$	(3.4	)		$	—			$	(1,873.9	)

Tax-exemption Information Related to Profits Generated from Certain Projects

As of December 31, 2021, the profits generated from the following project 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

X

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The disclosure of deferred taxes. [Refer: Deferred tax liabilities; Deferred tax assets]

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