Taxes are not only a cornerstone of national governments’ provision of local infrastructure and public services, but also an important source of funding to attain global sustainable development goals. In response to changes in global tax environment, increasingly complex cross-border transactions and global anti-avoidance trends, we continue to interact and cooperate with tax authorities in countries where we operate.
Under the trend of international tax equity, WT implements corporate governance and establishes a corporate tax culture through the formulation of tax governance policies and transfer pricing policies, while taking into account the overall development of operations and the creation of operating profits. We review our policies annually in accordance with international tax trends, and evaluate the need for revisions. We file honestly in accordance with the regulations of each location where we operate, and make proper use of relevant government tax incentive policies.
In the face of the upcoming Controlled Foreign Corporation (CFC) system, WT has adjusted its organizational structure to comply with the international anti-avoidance trend for tax fairness, reorganized its substantive operating affiliates registered in countries with low tax burdens, and prudently assessed the impact of the taxation policy on the Group. We also keep close watch on any revision of applicable laws and regulations.
Tax irregularities or unethical matters can be reported internally and externally through WT’s established whistleblower mechanism. All tax information disclosed in relevant public channels, such as annual reports of the shareholders’ meeting, is derived from financial statements certified by an accounting firm.
2021 saw a profit growth and lower cash effective tax rate.
WT’s effective income tax rate and cash effective tax rate in 2022 were 23.32% and 23.97% respectively, which is higher than the statutory income tax rate of 20% for profit-seeking enterprises in the Republic of China. It was mainly because the management retained part of the period’s annual surplus for working capital needed for the Group’s future business growth, and we had to pay the undistributed surplus tax. The effective cash tax rate was lower in 2021 mainly due to the difference in the timing of income tax payment and the substantial increase in profit in 2021 compared to 2020. The profit-seeking enterprise income taxes paid in Taiwan and China (including Hong Kong), WT’s main places of operation, accounted for 97% of the tax we paid in 2022.
2021 saw a profit growth and lower cash effective tax rate.
WT’s effective income tax rate and cash effective tax rate in 2022 were 23.32% and 23.97% respectively, which is higher than the statutory income tax rate of 20% for profit-seeking enterprises in the Republic of China. It was mainly because the management retained part of the period’s annual surplus for working capital needed for the Group’s future business growth, and we had to pay the undistributed surplus tax. The effective cash tax rate was lower in 2021 mainly due to the difference in the timing of income tax payment and the substantial increase in profit in 2021 compared to 2020. The profit-seeking enterprise income taxes paid in Taiwan and China (including Hong Kong), WT’s main places of operation, accounted for 97% of the tax we paid in 2022.
Risk control and management is the first step towards sound growth and sustainable operation
For the purpose of enforcing the Company’s risk management mechanisms and strengthening corporate governance, the Risk Management Committee was put in place in 2020. In order to keep risks arising from operating activities within tolerance, the risk management policies were passed on January 5, 2021 by the Board as WT’s risk management guidelines, which cover the purpose of management, scope of risks, organizational structure and responsibilities, management procedures, risk categories, and evaluation of risk management operations and implementation.
The Risk Management Committee was set up and designated for risk assessment
The Risk Management Committee is a committee of the Board of Directors and is composed of three Independent Directors, the Chairman and the Chief Financial Officer. One meeting at least is convened every year to report to the Board of Directors on the operation of risk management, additional meetings may be convened at any time as needed. Functional units are responsible for the implementation of risk analysis, improvement and tracking activities.
A Risk Management Task Force of the Risk Management Committee is going to be set up in 2023, with the General Manager as the convener, and relevant heads of functional units assigned by the General Manager according to the risk items managed as team members. The Risk Management Task Force will be the responsible unit for the implementation of risk management. It is mainly responsible for the overall risk management, including formulating risk management policies, structures and mechanisms, establishing qualitative and quantitative management standards, and reporting the risk management implementation status and results to the Risk Management Committee.
Risk types and identification
Risk Management and Countermeasures
Financial risk management is important for WT’s operations. For details of finance-related risk analysis and management policies, please see the Annual Report 2022. For details of information security-related and climate change-related risk analyses and management policies, please see Sections 2-6 and 4-2-1. Other risks related to WT’s operations are as follows:
Change in government policies and legislation
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Change in technologies
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Concentration of purchases or sales
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Emerging risks
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Integrity is WT’s most important core value and busines
In view of the growing importance of information securi
WT’s operating revenue increased by 28% from NTD447.9