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Income Tax (Tables)

12 Months Ended

Dec. 31, 2023

Text Block [Abstract]

Summary of Income Tax Expense

Income tax expense consisted of the following:

		Years Ended December 31
		2021								2022								2023
		NT$ (In Millions)								NT$ (In Millions)								NT$ (In Millions)
Current income tax expense
Current tax expense recognized in the current year				$	107,694.4							$	190,022.2							$	156,684.0
Income tax adjustments on prior years					(14,539.5	)							(19,413.0	)							(32,775.5	)
Other income tax adjustments					152.2								206.1								244.3
					93,307.1								170,815.3								124,152.8
Deferred income tax expense (benefit)
The origination and reversal of temporary differences					(17,530.0	)							(24,714.5	)							3,210.1
Investment tax credits					(5,621.7	)							4,676.7								925.9
					(23,151.7	)							(20,037.8	)							4,136.0
Income tax expense recognized in profit or loss				$	70,155.4							$	150,777.5							$	128,288.8

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
		2021								2022								2023
		NT$ (In Millions)								NT$ (In Millions)								NT$ (In Millions)
Income before tax				$	663,036.0							$	1,144,072.2							$	979,316.5
Income tax expense at the statutory rate				$	134,595.2							$	231,776.1							$	197,935.7
Tax effect of adjusting items:
Nondeductible (deductible) items in determining taxable income					11,279.5								12,309.8								(7,642.2	)
Tax-exempt income					(89,852.9	)							(157,955.9	)							-
Additional income tax under the Alternative Minimum Tax Act					32,852.7								61,578.0								-
Additional income tax on unappropriated earnings					18,849.5								42,336.8								29,221.8
The origination and reversal of temporary differences					(17,530.0	)							(24,714.5	)							3,210.1
Income tax credits					(5,651.3	)							4,654.1								(61,905.4	)
					84,542.7								169,984.4								160,820.0
Income tax adjustments on prior years					(14,539.5	)							(19,413.0	)							(32,775.5	)
Other income tax adjustments					152.2								206.1								244.3
Income tax expense recognized in profit or loss				$	70,155.4							$	150,777.5							$	128,288.8

The income tax adjustments on prior years were primarily due to the difference between the actual and estimated income tax on unappropriated earnings.

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, 2022												December 31, 2023
		NT$ (In Millions)												NT$ (In Millions)
Deferred income tax assets
Temporary differences
Depreciation						$	45,299.3											$	41,094.7
Refund liability							12,089.5												9,415.0
Unrealized exchange losses							5,782.4												7,100.0
Unrealized loss on inventories							2,305.3												2,771.2
Net defined benefit liability							1,722.0												1,729.7
Deferred compensation cost							361.2												489.6
Investment tax credits							945.0												19.1
Others							681.2												1,556.5
						$	69,185.9											$	64,175.8
Deferred income tax liabilities
Temporary differences
Others						$	(1,031.4	)										$	(53.8	)

		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$ (In Millions)												NT$ (In Millions)												NT$ (In Millions)												NT$ (In Millions)												NT$ (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
Others							317.8												59.1												(56.2	)											(5.5	)											315.2
						$	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	)

		Year Ended December 31, 2022
														Recognized in
		Balance, Beginning of Year												Profit or Loss												Other Comprehensive Income												Effect of Exchange Rate Changes												Balance, End of Year
						NT$ (In Millions)												NT$ (In Millions)												NT$ (In Millions)												NT$ (In Millions)												NT$ (In Millions)
Deferred income tax assets
Temporary differences
Depreciation						$	34,720.7											$	10,552.2											$	-											$	26.4											$	45,299.3
Refund liability							5,986.2												6,100.8												-												2.5												12,089.5
Unrealized exchange losses							-												5,782.4												-												-												5,782.4
Unrealized loss on inventories							899.0												1,402.2												-												4.1												2,305.3
Net defined benefit liability							1,237.1												(249.1	)											734.0												-												1,722.0
Investment tax credits							5,621.7												(4,676.7	)											-												-												945.0
Deferred compensation cost							374.0												(48.2	)											-												35.4												361.2
Others							315.2												334.9												-												31.1												681.2
						$	49,153.9											$	19,198.5											$	734.0											$	99.5											$	69,185.9
Deferred income tax liabilities
Temporary differences
Unrealized exchange gains						$	(706.3	)										$	706.3											$	-											$	-											$	-
Others							(1,167.6	)											133.0												6.0												(2.8	)											(1,031.4	)
						$	(1,873.9	)										$	839.3											$	6.0											$	(2.8	)										$	(1,031.4	)

		Year Ended December 31, 2023
														Recognized in
		Balance, Beginning of Year												Profit or Loss												Other Comprehensive Income												Effect of Exchange Rate Changes												Balance, End of Year
						NT$ (In Millions)												NT$ (In Millions)												NT$ (In Millions)												NT$ (In Millions)												NT$ (In Millions)
Deferred income tax assets
Temporary differences
Depreciation						$	45,299.3											$	(4,197.2	)										$	-											$	(7.4	)										$	41,094.7
Refund liability							12,089.5												(2,673.5	)											-												(1.0	)											9,415.0
Unrealized exchange losses							5,782.4												1,317.6												-												-												7,100.0
Unrealized loss on inventories							2,305.3												466.2												-												(0.3	)											2,771.2
Net defined benefit liability							1,722.0												(116.9	)											124.6												-												1,729.7
Deferred compensation cost							361.2												129.9												-												(1.5	)											489.6
Investment tax credits							945.0												(925.9	)											-												-												19.1
Others							681.2												887.0												-												(11.7	)											1,556.5
						$	69,185.9											$	(5,112.8	)										$	124.6											$	(21.9	)										$	64,175.8
Deferred income tax liabilities
Temporary differences
Others						$	(1,031.4	)										$	976.8											$	-											$	0.8											$	(53.8	)

Tax-exemption Information Related to Profits Generated from Certain Projects

As of December 31, 2022, 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

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- Definition

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

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