Page 316 - TSMC 2018 Annual Report

26. INCOME TAX
a. Income tax expense recognized in profit or loss Income tax expense consisted of the following:
Current income tax expense
Current tax expense recognized in the current year Income tax adjustments on prior years
Other income tax adjustments
Deferred income tax benefit
Effect of tax rate changes
The origination and reversal of temporary differences
Income tax expense recognized in profit or loss
Years Ended December 31
$
$
2018
50,511,247 (963,356)
149,771 49,697,662
(1,466,706) (3,163,687) (4,630,393)
45,067,269
$
$
2017
55,187,468 (938,292)
150,168 54,399,344
- (4,194,644) (4,191,644)
50,204,700
A reconciliation of income before income tax and income tax expense recognized in profit or loss was as follows:
Years Ended December 31
Income before tax
Income tax expense at the statutory rate Tax effect of adjusting items:
Nondeductible (deductible) items in determining taxable income
Tax-exempt income
Additional income tax under the Alternative Minimum Tax Act Additional income tax on unappropriated earnings
Effect of tax rate changes on deferred income tax
The origination and reversal of temporary differences
Income tax credits
Income tax adjustments on prior years Other income tax adjustments
Income tax expense recognized in profit or loss
2018
$ 396,198,153
2017
$ 393,316,176
$
79,239,631
2,636,232 (54,234,074)
21,455,854 7,420,479
(1,466,706) (3,163,687) (6,006,875)
45,880,854 (963,356)
149,771 45,067,269
$
66,863,750
(1,438,813) (16,467,720)
- 11,835,948 -
(4,194,644) (5,605,697)
50,992,824 (938,292)
150,168 50,204,700
$
$
For the year ended December 31, 2017, the Company applied a tax rate of 17% for entities subject to the R.O.C. Income Tax Law. In February 2018, the Income Tax Law in the R.O.C. was amended and, starting from 2018, the corporate income tax rate was adjusted from 17% to 20%. In addition, the tax rate for 2018 unappropriated earnings was reduced from 10% to 5%.
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