Sustainability Development

Tax Strategy and Tax Policy

“IRPC Group strictly adheres to the principles of sustainable transparency and fairness. When engaging with tax-related matters, these principles are embedded at all levels of our organization to ensure alignment in tax approaches among all IRPC Group companies and to promote good governance and accountability at all times. We are committed to conducting our business in full compliance with relevant rules, laws and regulations, aiming to build sustainable trust with stakeholders and societies where we operate.”

In that spirit, our tax policies consist of 4 pillars:

Tax Code of Conduct: We strive to achieve sustainable and competitive company taxation and sustainable value and growth including good corporate tax citizenship with added value for society.
  • - Manage the taxation for stakeholders’ benefits by paying tax properly as required by law.
  • - Taxed where the economic activities generating the profits are performed.
  • - Aware of direct and indirect risks from aggressive tax planning and do not use contrived or abnormal tax structures that are intended for tax avoidance and have no commercial substance.
  • - Transactions between related parties are based on arm’s length principle to ensure that the fair share of taxes is paid with respect to our function performed and our business strategies.
Tax Alignment with Corporate Strategy and Business Goal: IRPC pursues a tax strategy that is principled, transparent and sustainable in the long term as well as considers tax impact for investments and new transactions. For the benefit of stakeholders, IRPC Group will consider tax incentives/exemption available for our commercial activities.

Tax Risk Management: IRPC considers tax risks to ensure that tax risks are identified, managed, and reported to the management and our tax positions are supported by relevant laws. We will regularly review relevant laws to ensure that emerging risks are addressed.

Tax Transparency: All relevant tax information will be timely submitted to governing authorities and enhancing transparency of our tax affair, fulfilling all statutory disclosure requirements on taxation.

Tax Reporting
In order to emphasize our transparency and corporate governance, taxes paid to Thailand, which only one country where IRPC has operated business, are disclosed. Revenue, operating profit, and tax paid for the Year 2018 as shown below.
Reported tax rate and cash tax rate for the year 2018

Financial Reporting FY 2017 FY 2018 Calculated Average Rate
Earnings before Tax 13,540,781,467 8,915,232,356  
Reported Taxes 2,181,334,015 1,146,588,101  
Cumulative acceptable adjustments* 0 0  
Effective Tax Rate (%) 16.1 12.9 14.5
Cash Taxes Paid 52,026,714 1,276,515,668  
Cash Tax Rate (%) 0.4 14.3 5.92
Remark: *‘Cumulative acceptable adjustments’ will be automatically calculated based on amounts in three of the ‘reasons’; 1. Non-recurring (one time) operating losses in own operations; 2.Net operating losses from prior periods and/or acquired companies; and 3. Timing - net deferred tax assets/liabilities and major issues outside of the two year period reported. IRPC do not have any such amounts in 2017 or 2018.

IRPC operates business with transparency which complies with applicable laws as good corporate tax citizenship with our aim to add value for all stakeholders. IRPC average Reported Tax Rate and Cash Tax Rate is 14.5 percent and 7.35 percent, respectively. All IRPC operations are in Thailand where the tax rate is 20% and industry average rate is 22.86%. The difference is due to single jurisdiction tax code from income not subject to tax and Thailand tax ‘promotional privilege’. Income not subject to tax is made up of Recoverable tax assets is done in accordance with Thai Financial Reporting Standards 36 (Impairment of Assets) and dividends from the Stock Exchange and subsidiaries is done in accordance to Code of Revenue Section.65 Bis (10). Details about Thailand tax ‘promotional privilege’ that IRPC granted from the Board of Investment is public disclosed in IRPC’s 2018 Financial Statements, Note 34, P.56. In addition, for the year ended December 31, 2017, IRPC had a taxable loss carried forward which can be utilized as a tax benefit. This was fully utilized in 2018, and there is no taxable loss carried forward at December 31, 2018: cash taxes paid in FY18 are similar to reported taxes in FY18. For more information about IRPC’s reported tax rate and cash tax rate please refer to our 2018 financial statement