Tax Disclosure
GC consistently acts with a transparent and collaborative approach with all institutions and associations to support the development of effective tax systems in the various countries where it operates.
The table below shows the Consolidated sale revenue breakdown by tax jurisdiction for the year 2024.
| Consolidated sale revenue breakdown by tax jurisdiction for the year 2024 | |
|---|---|
| Thailand | 83% |
| USA | 3% |
| China | 3% |
| Germany | 2% |
| France | 1% |
| Others | 8% |
Sales revenue of main products breakdown by geographical locations of customers for the year 2024
SALES REVENUE OF MAIN PRODUCTS
Breakdown by Geography Year 2024
- Represent the sales revenue based on the geographical location of customers.
- More than 80% of sale revenue reported in consolidated financial statement was from business operations conducted in Thailand.
Total sales and services revenue of GC Group is mainly from Thailand. Thai governments develop tax incentives which generally be available to any business that meets the relevant criteria as commonly using in many countries in order to encourage investment, usually results in job creation and the expansion of infrastructure, aiding social and economic development. For example, i) in Singapore, company can use tax exemption for eligible criteria and ii) in Switzerland, the tax holiday is generally granted for five to ten years based on the federal law on regional politic.
GC uses available and appropriate tax incentives and tax holidays where we have a qualifying business activity. Most of our local operations relating to refinery and petrochemical mainly obtained tax privileges granted by the Thai Government, namely “the Board of Investment (BOI) of Thailand”, which offered into three main areas (please see in more details : https://www.boi.go.th/index.php?page=incentive):
- Corporate income tax exemption (tax holiday) for 8 years from the date on which the income is first derived from such operations; and
- A 50% reduction in the normal income tax rate for another 5 years, commencing from the expiry date in (i) above; and
- Double deduction of transportation, electricity, and water costs from corporate taxable income for 10 years.
Thailand BOI has announced new measure for companies impacted by global minimum tax under the BEPS 2.0 Pillar Two project. This new measure allows the option for companies currently applying BOI income tax exemption incentives in Thailand to elect applying 50 percent of the statutory corporate income tax (CIT) rate at 20 percent, thereby applying a 10 percent CIT rate for the remaining tax exemption period which is limited to a maximum of ten years. Furthermore, Thai Revenue Department has issued the Royal Decree on Additional Taxation B.E. 2567 (Pillar 2 - Global Anti-Base Erosion Rules), which will take effect in 2025. Accordingly, GC has been closely monitoring and assessing the potential impacts of the BEPS 2.0 Pillar 2 as well as the BOI’s current investment promotional measures, in order to establish a strategic direction for tax and investment planning that aligns with the evolving international context.
The statutory corporate income tax (CIT) in Thailand is levied at the rate of 20% on taxable profits. Partial Business Unit of GC Group’s Effective Tax Rate (ETR) was generally much lower due to tax exemption and privileges obtained from BOI as mentioned above. Nonetheless, ETR does vary year by year dependent upon the effective periods of the privileges and operating performances.
We have disclosed ‘Tax Reporting by Countries’ and ‘Reported Tax Rate and Cash Tax Rate’ which is beyond the requirement of Public Listed Company on the Stock Exchange of Thailand or Government in Thailand.
Tax Reporting by Countries for the Year 2024
The table below presents total revenue, operating profit, income tax expense, income tax paid (received), number of employees, name of entities, and main business activities for countries in which GC Group operates. The financial information can be reconciled to our consolidated financial statement for the year 2024. Sector-specific taxes, VAT, and other fiscal contributions/levies, which often exceed the total corporate income tax, are not included.
More information on Tax Reporting by Countries: Tax Reporting by Countries for the Year 2024
GC Group performance comparison between 2024 and 2023 described the following
- In 2024, GC’s total sales revenue declined compared to the previous year, primarily due to lower revenue from the upstream petrochemical business, driven by a decrease in the prices of petroleum products and Aromatics. This occurred despite an increase in petrochemical sale volume, particularly in Intermediate products, as there were planned maintenance shutdowns in 2023 at the Monoethylene Glycol (MEG) plant during the first half of the year and Phenol plant 2.
- The Company recorded a net loss of THB 31,182 million, a decline from the previous year, mainly due to two key factors. 1) the performance of the Refinery business weakened in line with a lower Gross Refining Margin (GRM), primarily driven by a narrower spread between diesel and crude oil prices. The Petrochemical business also remained under pressure from the sluggish economic recovery, resulting in continued weak demand and additional supply entering the market during the year, and 2) the Company recognized extraordinary items, including provisions related to the entire business restructuring process and impairment losses totally at Baht 21,802 million, as well as a stock loss and net realizable value (NRV) adjustment of inventory of THB 2,457 million.
- Income Tax Accrued (Current year) decreased due to operational performance of both domestic and international businesses. These expenses reflect only the current year’s operations and do not include deferred tax or provisions for uncertain tax liabilities. The income taxes paid this year mainly comprise corporate income tax payable from the previous year, which had the obligation to pay in current year.
Reported Tax Rate and Cash Tax Rate for the year 2024
Unit : Million THB
| 2023 | 2024 | Calculated Average | |
|---|---|---|---|
| Earnings before Tax |
2,217
|
(31,182)
|
-
|
| Reported Taxes |
1,352
|
(1,168)
|
-
|
| Reported Tax Rate (Percent) |
61.0%
|
0.0%
|
0.6%
|
| Cash Taxes Paid |
1,450
|
1,805
|
-
|
| Cash Tax Rate (Percent) |
65.4%
|
-5.8%
|
(1.2%)
|
Even though, GC recorded a profit in 2023, it reported a net loss of THB 31,182 million in the current year, representing a significant decline from the previous year. This was mainly due to weaker performance in the Refinery business, in line with a lower Gross Refining Margin (GRM), primarily driven by a narrower spread between diesel and crude oil prices. The Petrochemical business also continued to face pressure from a sluggish economic environment, leading to subdued demand and increased supply entering the market during the year.
In addition, GC recognized non-operating items, including 1) estimated liabilities related to expenses for the business restructuring process and 2) losses from the net realizable value (NRV) adjustment of inventories.
As a result of this loss, GC’s reported tax rate for the year was 0.0%, while the cash tax rate stood at 5.8%, both of which declined due to the business performance in both domestic and international operations.
In general, the difference between Reported tax rate and Cash tax paid was mainly caused by the following factors:
- Deferred tax; the temporary difference between tax and accounting rules
- Timing of tax payments; the tax liability of a certain year is generally partly paid in current year, and partly in the following year.
Reconciliation of Effective Tax Rate
GC group’s Effective Tax Rate reconciliation has shown with explanation as follows:
| Description | Rate | 2023 (Million THB) |
Rate | 2024 (Million THB) |
|---|---|---|---|---|
| Profit (loss) before income tax expense |
2,217
|
(31,182)
|
||
| Income Tax using Thai corporation tax rate |
20%
|
443
|
20%
|
(6,236)
|
| Effect of different tax rates in foreign jurisdictions |
(239)
|
(1,207)
|
||
| Income not subject to tax |
(202)
|
(335)
|
||
| Non-deductible tax expenses |
1,746
|
4,971
|
||
| Expenses deductible at a greater amount |
(487)
|
(599)
|
||
| Tax loss carry forward |
38
|
76
|
||
| Over provided in prior years |
(68)
|
16
|
||
| Share of profit of investments in joint ventures and associate |
77
|
2,133
|
||
| Other |
44
|
13
|
||
| Total |
0.0%
|
1,352
|
61.0%
|
(1,168)
|