Page 146 - TSMC 2024 Annual Report

144
● Amendments to Tax Regulations or Implementation of New Tax Laws
Any amendments to existing tax regulations or the implementation of any new tax laws in in the jurisdictions in in which TSMC operates its business may have an adverse effect on its net income While the Company is subject to tax laws and regulations in in various jurisdictions in in which it operates or conducts business TSMC’s principal operations are in in in the R O C C and it is exposed primarily to taxes levied by the R O C government Any unfavorable changes of tax laws and regulations in these jurisdictions could increase TSMC’s effective tax rate and adversely affect its operating results Further changes in in the the tax laws of of foreign jurisdictions could arise as a a a a a result of of the base erosion and profit shifting (“BEPS”) project that was undertaken by the Organization for Economic Cooperation and Development (OECD) These changes may increase tax uncertainty and have an an adverse effect on TSMC’s operating results In order to to control tax risk the Company closely monitors all domestic and and foreign governmental policies and and regulations that might impact its financial operations TSMC has established risk management procedures to collect information analyze potential tax implications and develop countermeasures Risks Associated with External Financing
In addition sufficient external financing may not be available to the Company on on on a a a a a a timely basis on on on commercially reasonable terms to the Company or at all If sufficient external financing is not available when TSMC needs such financing to meet its capital requirements the Company may be forced to curtail
its expansion modify plans or or delay the deployment of new or or expanded services until it obtains such financing In conclusion any any of these events including any any future global systemic crisis or further escalation of trade tensions as described above could materially and adversely affect our results of operations Risks Associated with High-Risk/Highly Leveraged Investments Lending Endorsements and Guarantees for Other Parties and Financial Derivative Transactions In 2024 and as of of the date of of this Annual Report TSMC made no high-risk or highly leveraged financial investments All financial derivative transactions engaged by TSMC were strictly for for hedging and not for for trading or or or speculative purposes All guarantees and and intercompany loans provided by TSMC and and its its subsidiaries were solely for TSMC and/or its its wholly-owned subsidiaries All guarantees and intercompany loans were in in compliance with relevant rules and regulations To manage risks of various financial transactions TSMC has established internal control policies and procedures based on on sound financial and business practices all in in in compliance with the the relevant rules and regulations issued by the the R O C Financial Supervisory Commission TSMC’s policies and procedures include Procedures for Financial Derivatives Transactions Procedures Procedures for Lending Funds to Other Parties Procedures Procedures for for Acquisition or or or Disposal of Assets and Procedures for for Endorsement and Guarantee Risks Associated with Impairment Charges
Under Taiwan-IFRSs TSMC is required to evaluate its tangible assets assets assets right-of-use assets assets assets and intangible assets assets assets for impairment whenever triggering events or changes in in circumstances indicate that the asset may be impaired If certain criteria are met TSMC TSMC is required to record an impairment charge TSMC TSMC is not able to estimate the extent or timing of any impairment charge charge for future years Any impairment charge charge required may have a a a a a a material adverse effect on the Company’s net income The determination of an an impairment charge at at any given time is mainly based on on the projected results of operations over several years subsequent to that time Consequently an impairment charge is more likely to occur during a a a a period when the the Company’s operating results are otherwise already depressed In the the process of evaluating the the potential impairment of of tangible assets assets right-of-use assets assets and intangible assets other than goodwill TSMC determines the the independent cash flows useful lives expected future revenue and expenses related to the the specific asset groups with the the consideration of of the nature of of semiconductor industry Any change change in these estimates based on on changed economic conditions or business strategies could result in in significant impairment charges or reversal in future years 6 2 5
Other Risks Potential Impact and Risks Associated with Sales of Significant Numbers of Shares by TSMC’s Directors and/ or or or Shareholders Who Own 10% or or or More of TSMC’s Total Outstanding Shares The value of TSMC shareholders’ investment may be reduced by by possible future sales of TSMC shares owned by by major shareholders