Taxation
Income tax expense is the sum of the tax currently payable and deferred tax.
a.Current tax
According to the Income Tax Law, an additional tax at 10% of unappropriated earnings is provided for as
income tax in the year the shareholders approve to retain the earnings.
Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.
b.Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of taxable
profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax
assets are generally recognized for all deductible temporary differences and unused loss carryforwards
to the extent that it is probable that taxable profits will be available against which those deductible
temporary differences can be used. These deferred tax assets and liabilities are not recognized if the
temporary difference arises from the initial recognition of other assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in
associates, except where the Corporation can control the reversal of the temporary difference and it is
probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets
arising from deductible temporary differences associated with these investments and interests are only
recognized to the extent that it is probable that there will be sufficient taxable profits against which to
use the benefits of the temporary differences and that these deferred tax assets are expected to reverse
in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at the
end of each reporting period and recognized to the extent that it has become probable that future
taxable profit will allow the deferred tax asset to be recovered.
Deferred tax liabilities and assets are measured in accordance with tax rates and tax laws that are
expected to apply to the reporting period in which the liability is settled or the asset realized if these
tax rates and laws have been enacted or substantively enacted by the end of the reporting period. The
measurement of deferred tax liabilities and assets reflects the tax consequences of how the Corporation
expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and
liabilities.
c.Current and deferred taxes for the year
Current and deferred taxes are recognized in profit or loss, but when these taxes relate to items that are
recognized in other comprehensive income or directly in equity, the current and deferred taxes are also
recognized in other comprehensive income or directly in equity, respectively.
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Financial Statements
