Recognizing that “tax” is critical to sustainable development. It not only promotes and supports competitiveness of the business but also helps create positive socio-economic impacts as well as national development as a whole. The Company is committed to tax management as in our Tax Policy based on the principles of accuracy, transparency, and accountability in compliance with the Thailand Revenue Code and foreign tax laws for the highest benefits of the Company and all stakeholders.
In 2018 and 2019, the Company’s Revenue was THB 541,937 million and 532,573 million respectively, Operating profit (EBT) was THB 27,637 million and 29,544 million respectively and Tax Paid was THB 5,296 million and 5,657 million respectively.
Reconciliation of Effective Tax Rate
|Accounting profit (loss) before income tax, net (EBT)||27,637||29,544|
|Tax at the applicable tax rates (1)||5,084||5,289|
|% of EBT||18.4%||17.9%|
|Tax effect of income and expenses that are not taxable income|
|or not deductible in determining taxable profit, net (2)||504||938|
|Current tax - Under (Over) provided in prior years||(292)||(570)|
|Current tax year||5,296||5,657|
|% of EBT||19.2%||19.2%|
|- Movements in temporary differences (3)||(716)||(210)|
|- Benefit of tax losses recognised (4)||1,642||(1)|
|- Effect from change in tax rate (5)||(10)||0|
|Income tax expense (income)้||6,212||5,446|
|% of EBT||22.5%||18.4%|
|% of EBT||20.5%||16.6%|
(1) Income tax rate
The tax rate used in this calculation, as disclosed in the notes to financial statements No. 28, is lower than the average income tax rate of each country in which the Company has invested because some of its income is exempted from the income tax. For example, in Thailand, the Company has been granted privileges as an investment promotion under the Investment Promotion Act BE 2520 (AD 1977) in various types of businesses such as animal feed production business, animal husbandry business, animal breeding business and processing of food and ready-to-eat business. By doing so, the Company will be exempted from corporate income tax for the net profit received from the promoted business according to the period and conditions specified in each investment promotional certificates, and receive a 50% reduction in corporate income tax for the net profit derived from the promoted business for a period of 5 years from the expiration of the tax exemption period.
In addition, the share of profits from investments in joint ventures which the Company has recognized as its income under the equity method and included in the profit (loss) before tax expenses in the consolidated financial statements is also considered as income.
(2) Tax effect of income that is not considered as income and expenses that are not considered as tax expenses such as
- Entertainment and donation expenses in excess of the amount allowed to be deducted by the tax law
- Some kind of expenses that can be deducted as tax expenses more than one hundred percent, such as training expense, research & development expense and donation expense
- Profit (loss) from the exchange rate used in the calculation of income tax but not included in accounting profit (loss)
- Dividend income of the listed companies on the stock exchange obtained from limited companies established under Thai law
(3) Changes in temporary differences such as
- Gain (loss) from changes in the fair value of biological assets
- Differences in the calculation of depreciation and amortization of accounting and tax methods
(4) Tax loss
In 2018 some of those companies have the operating profit therefore reversed the deferred tax assets and recorded as tax expenses, but in the year 2019, some subsidiaries had tax losses and were recognized as deferred tax assets and tax income.
(5) Effects of changes in tax rates
Taiwan Legislative Yuan passed the amendments to the Income Tax Act on January 18, 2018. The tax reform measures will apply retroactively for taxable years beginning as from 2018 (i.e. 1 January 2018 for calendar-year taxpayers). The amendments to the Income Tax Act included Increase in the corporate income tax rate from 17% to 20%. The Company has therefore adjusted the effect of the change by recording tax income and increasing the deferred tax assets in the year 2018.
Revenue, Operating Profit (EBT) and Tax Paid (Current Tax)
|Geographic Area||Revenue||Operating Profit (EBT)||Tax Paid (Current Tax)|
|THB million||%||THB million||%||THB million||%||THB million||%||THB million||%||THB million||%|
- Revenue : Sales income presented in the income statement
- Operating profit (EBT) : Net income(loss) before income tax expense presented in the income statement
- Tax paid(Current tax) : Income tax paid as presented in the note to financial statement No.28
- Asia : Comprise of Thailand, China (Mainland incl.Taiwan), Vietnam, India, Cambodia and The Phillipines
- Europe : Comprise of Russia, Turkey, England, Belgiam and etc.
- Others : Comprise of America and Africa continent
The Company’s revenues by country were as follow:
|THB million||%||THB million||%|
|China (Mainland incl.Taiwan)||169,613||31.3||156,320||29.4|
*Remark: others include Phillipines, Malaysia, Laos, Sri-Lanka, Belgium, Canada, etc