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 2022.
| Consolidated sale revenue breakdown by tax jurisdiction for the year 2022 | |
|---|---|
| Thailand | 82% |
| USA | 3% |
| France | 2% |
| China | 2% |
| Germany | 2% |
| Others | 9% |
Sales revenue of main products breakdown by geographical locations of customers for the year 2022
SALES REVENUE OF MAIN PRODUCTS
Breakdown by Geography Year 2022
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 Group 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.
The statutory corporate income tax (CIT) in Thailand is levied at the rate of 20% on taxable profits. 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 ‘CIT Contribution 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 2022
The attached file below presents Revenues, Profit (Loss) before tax, Income Tax Accrued (Current year), 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 2022. 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 2022
GC Group performance comparison between 2022 and 2021 described the following:
- For 2022 performance, the Company had total sales revenue increased from the previous due to several factors such as the global economic recovery with the economy now re-opened and demand increased. Another factor was the Russia-Ukraine conflict has triggered a global energy crisis. This led to a surge in both Petroleum products price and Petrochemical products, in line with the rise in oil price. Additionally, the Company also started the consolidation of allnex’s financial performance.
- Net operating loss decreased from the previous year, mainly due to the spreads weakened for all major petrochemical products resulted from the higher production costs, resulted from the Russia-Ukraine war. In addition, the Company had Loss from commodity hedging of Baht 23,057 million as the Petroleum product spreads were higher than the hedged price.
- Income Tax Accrued (Current year) decreased which was driven by some of local and oversea operations had profitability. This current tax expense only reflects operations in the current year and does not include deferred taxes or provisions for uncertain tax liabilities. Whist, income tax paid incurred which were mainly from the corporate income tax accrued from the previous year, which had the obligation to pay in current year.
Reported Tax Rate and Cash Tax Rate for the year 2022
Unit : Million THB
| 2021 | 2022 | Calculated Average | |
|---|---|---|---|
| Earnings before Tax |
52,778
|
(9,909)
|
-
|
| Reported Taxes |
7,228
|
(2,273)
|
-
|
| Reported Tax Rate (Percent) |
13.7%
|
0.0%
|
11.6%
|
| Cash Taxes Paid |
4,203
|
2,754
|
-
|
| Cash Tax Rate (Percent) |
8.0%
|
(27.8)%
|
16.2%
|
In 2022, the Company had Loss before Tax of Baht 9,909 million, significantly decreased from 2021, mainly due to the spreads weakened for all major petrochemical products resulted from the higher production costs, resulted from the Russia-Ukraine war. In addition, the Company had Loss from commodity hedging as the Petroleum product spreads were higher than the hedged price.
As the group has operating loss, resulted in Reported Tax Rate is 0.0%, while Cash Tax Rate is -27.8%, which mainly decreased from the corporate income tax accrued from the previous year. Cash Tax Paid of current year is calculated from tax payment of prior year and first half of current year.
In general, the difference between Reported tax rate and Cash tax rate 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 | 2021 (Million THB) |
Rate | 2022 (Million THB) |
|---|---|---|---|---|
| Profit (loss) before income tax expense |
52,778
|
(9,909)
|
||
| Income Tax using Thai corporation tax rate |
20%
|
10,556
|
20%
|
(1,982)
|
| Effect of different tax rates in foreign jurisdictions |
1,823
|
(317)
|
||
| Income not subject to tax |
(1,873)
|
(425)
|
||
| Non-deductible tax expenses |
1,315
|
2,486
|
||
| Expenses deductible at a greater amount |
(3,471)
|
(2,121)
|
||
| Tax loss carry forward |
(2,112)
|
(12)
|
||
| Over provided in prior years |
(41)
|
249
|
||
| Share of profit of investments in joint ventures and associate |
(1,368)
|
(511)
|
||
| Other |
2,399
|
360
|
||
| Total |
13.7%
|
7,228
|
0.0%
|
(2,273)
|