Tax Strategy

“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.

 

IRPC Group Tax Strategy and Policy are duly reviewed by the CEO and CFO, where the CEO being members of BOD and RMC, and are authorized to act as a representative of the Board of Directors in endorse tax policy including various policies in the company and has appointed Accounting Department to be responsible for the development and implementation of tax matters and providing assurance based on our tax compliance and management.

Later in 2021, IRPC proposed new “IRPC Way of Conduct” of which contained “Tax policy” and other related policies to the Board of Director to endorsed and announced to be complied throughout the value chain. [Link] click for more information.

For more information on IRPC Group Tax Policy, please click [Link]

 

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 2021 as shown below.

Financial and tax information for each tax jurisdiction publicly reporting. IRPC’s Group operations being based in Thailand only.

[Click] for Tax Reporting in 2021

 Reported tax rate and cash tax rate for the year 2021

Financial Reporting FY 2020 FY 2021 Calculated Average Rate
Earnings before Tax (Loss) -7,683,762,822 16,884,084,379
Reported Taxes -1,553,742,419 2,351,267,186
Cumulative acceptable adjustments* 0 0
Effective Tax Rate (%) 20.22111 13.92594 8.66844
Cash Taxes Paid 54,957,259 186,131,478
Cash Tax Rate (%) -0.71524 1.10241 2.62044

Remark: *‘Cumulative acceptable adjustments’ will be calculated based on amounts in two of the ‘reasons’; 1. Group-wide net operating losses; 2. Single jurisdiction tax code

IRPC operates business with transparency which complies with applicable laws as good corporate tax citizenship with our aim to add value for all stakeholders. Those two reasons for the lower ‘reported tax’ rate is explained below:

One reason for the lower ‘reported tax’ rate is single jurisdiction tax code, with lower rates for Thailand compared with industry average:  Revenue Code Amendment Act No. 42 B.E. 2559 dated 3 March 2016 grants a reduction of the corporate income tax rate to 20% of net taxable profit for accounting periods which begin on or after 1 January 2016.

According to 2021 IRPC’s 2021 Financial Statements, Note 17, P.342, Income not subject to tax in 2020 is 65 million THB, and in 2021 is 1 million THB. For IRPC, this amount is made up of:

  • 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.

Under the Investment Promotion Act B.E. 2520 (1977) a board of investment (“BOI”) was established to promote both foreign and Thai investment by providing tax and non-tax incentives. The Investment Promotion Act has been amended from time to time since its enactment to make it appropriate to changing global and domestic economic situations. The Investment Promotion Act (No. 4) B.E. 2560 (2017) became effective on 25 January 2017.

 

The legislation allows the BOI to grant a “promoted company” corporate income tax exemptions of up to 13 years for businesses that use high technology and innovation and for businesses in research and development (R&D). It also allows for an exemption from import duty on goods imported to be used in R&D activities. Furthermore, tax losses incurred during the tax-exemption period could be carried forward and used within five years after the tax-exemption period expires.

IRPC has been granted privileges by the Board of Investment. Full details are included in IRPC’s 2021 One Report , including the duration of the privileges and affected revenues. The tax burden reduction is 0 million THB in 2020 and 884 million THB (See 2021 IRPC’s One Report)

 

* The tax burden reduction is 0 million THB in 2020

 


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