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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 2017 as shown below.
Reported tax rate and cash tax rate for the year 2017

Financial Reporting 2016 2017 Calculated Average
Earnings before tax 10,034 13,541 -
Reported taxes 282 2,181 -
Reported tax rate (in %) 2.8 16.1 9.45
Cash taxes paid 68 52 -
Cash tax rate (in %) 0.7 0.4 0.55

In Thailand where IRPC is operating we make an effort to comply with applicable laws as good corporate tax citizenship with added value for societies and stakeholders. IRPC Average Reported Tax Rate and Cash Tax Rate of 9.45 percent and 0.55 percent, respectively, were lower than Industry Effective Tax Rate due to:

- Single jurisdiction tax code
  • All of IRPC operations are located in Thailand where the corporation tax rate is 20%. In 2016, compared with industry average effective rate of 25.1%, this explains 512 million THB difference. In 2017, it explains 691 million THB difference.
  • Income not subject to tax in 2016 is 769 million THB, and in 2017 is 145 million THB.
    For IRPC, this amount is made up of:
    • Recoverable tax assets is done in accordance with Thai Financial Reporting Standards 36 (Impairment of Assets).
    • According to Code of Revenue Section.65 Bis (10), dividends from the Stock Exchange and subsidiaries which is recognized as income but is not subject to tax.
  • IRPC has been granted privileges by the Board of Investment. Income subject to tax exemption are 271 million THB in 2016 and 375 million THB in 2017.
  • For the year ended December 31, 2017, IRPC has a taxable loss carried forward which can be utilized as a tax benefit therefore, there is no income tax for the current period in the separate statement of income. The income tax presented in the consolidated statement of income (19 million THB in 2016 and 16 million THB in 2017) are calculated from the taxable net profit of subsidiaries at 20% tax rate.
- Timing - issues outside of the two year period reported

Previously unrecognized tax losses according to Code of Revenue Section.65 Ter (12), in 2016, IRPC had deferred revenue from the accumulate deficit that can be used for tax deduction with the amount of 698 million THB. This complies with IFRS accounting standard Volume.12 Deferred Tax.