tax management
Tax Management
Tipco Asphalt Group (the Group) strongly commits to good corporate governance principles and transparent business conduct while serving as a good corporate citizen in line with sustainable development philosophy across economic, social, and environmental aspects. Tipco Asphalt Group establishes the following tax management guidelines to adhere to relevant rules and regulations, as well as the spirit and letter of the laws and regulations in the countries in which the company operates.
Management approach
The Group has announced its Tax policy. All relevant details are explained through the online system. This policy covers the measurement and assessment of tax risks, tax filing in a timely manner, tax-related impacts associated with new investment projects. In addition, the Tax policy states that all related party transactions within the Group are conducted in accordance with in accordance with international tax principles and the arm’s length principle for transfer pricing.
The Group shall not conduct intentional tax evasion and refrains from utilizing tax structures without commercial substance, as well as refraining from transferring value created to low tax jurisdictions or investment in the so-called “tax havens”.
Stakeholders :
Investors, Regulators, Board of Directors, and Employees
Short-term goals :
- Digitalize tax operations processes
- Organize knowledge sharing session for employees on tax regulations
Long-term goal :
- Fully digitize the tax management system
Key Performances :
- Assess and review tax risks for transparency and comply with regulatory
- Develop and enhance tax knowledge for employees.
2023 tax reporting (‘000 Baht)
Country | Revenue | Profit (Loss) before tax | Income tax accrued (current year) | Income Tax expense | Income tax paid | Number of Employee (FTE) |
|---|---|---|---|---|---|---|
Thailand
| 31,338,681
| 2,899,796
| 93,059 | 516,208 | 992,079 | 1,208 |
Other Countries
| 10,625,236
| 137,573
| 28,594
| 66,995
| 248,191
| 822 |
Total | 41,963,917
| 3,037,369 | 121,653 | 583,203 | 1,240,270
| 2,030 |
Entities and Business Activities by Locations
Entity’s name | Main Business Activities | |
|---|---|---|
Thailand
| Tipco Asphalt Public Company Limited
| Manufacture and distribution of asphalt and petroleum products
|
Raycol Asphalt Co., Ltd.
| Manufacture and distribution of asphalt products
| |
Thai Bitumen Co., Ltd.
| Manufacture and distribution of asphalt products
| |
Ravana 1020 Co., Ltd.
| Distribution of machine, materials and tools relating to road construction
| |
Indrachit Holding Co., Ltd.
| Holding company
| |
Tipco Maritime Co., Ltd.
| Shipping management and agency
| |
Alpha Maritime Co., Ltd.
| Marine transportation
| |
Bitumen Marine Co., Ltd.
| Marine transportation
| |
Tasco Shipping Co., Ltd.
| Marine transportation
| |
Thai Slurry Seal Co., Ltd.
| Road rehabilitation services and sales of construction materials
| |
Thanomwongse Service Co., Ltd.
| Construction service and sales of construction materials
| |
Other Countries
| Kemaman Oil Corporation Sdn Bhd
| Holding company, manufacture, storer, tank rental and distribution of asphalt and petroleum products
|
Kemaman Bitumen Company Sdn Bhd
| Manufacture, refinery, storer and distribution of asphalt and petroleum products
| |
KBC Trading Sdn Bhd
| Distribution of asphalt products
| |
Highway Resources Pte. Ltd.
| Holding company
| |
Highway Resources Trading Pte. Ltd.
| Dormant
| |
AD Shipping Pte. Ltd.
| Marine transportation
| |
Reta Link Pte. Ltd.
| Marine transportation
| |
Pacific Bitumen Shipping Pte. Ltd.
| Marine transportation
| |
Asphalt Distribution Co., Ltd.
| Manufacture and distribution of asphalt products
| |
PT Asphalt Bangun Sarana
| Manufacture and distribution of asphalt products
| |
PT Saranaraya Reka Cipta
| Manufacture and distribution of asphalt products
| |
Tipco Asphalt (Cambodia) Co., Ltd.
| Manufacture and distribution of asphalt products
| |
Tipco Asphalt Lao Co., Ltd.
| Manufacture and distribution of asphalt products
| |
Tasco International (Hong Kong) Ltd.
| Holding company
| |
Langfang Tongtai Road Material Co., Ltd.
| Manufacture and distribution of asphalt products
| |
Tipco Asphalt (Xinhui) Co., Ltd.
| Manufacture and distribution of asphalt products
| |
Guangzhou Tipco Asphalt Trading Co., Ltd.
| Distribution of asphalt products
|
Effective Tax Rate
The corporate income tax rate for the Group, a group of companies, is in the range of 17% – 25%. The corporate income tax rate in Thailand is 20%. In the year 2023, the Group had a corporate income tax rate of 25% based on the consolidated financial statements and 19% based on the seperate financial statements.
| ITEM | 2021 | 2022 | 2023 | |||
| Consolidated Financial Statement |
Separate Financial Statement |
Consolidated Financial Statement |
Separate Financial Statement |
Consolidated Financial Statement |
Separate Financial Statement |
|
| Sales & Service Income | 24,447.11 | 21,429.75 | 30,024.76 | 25,944.95 | 27,604.65 | 23,383.18 |
| Constuction Income Tax | 2,605.66 | - | 3,375.78 | - | 3,501.35 | - |
| Profit Before Income Tax | 3,005.37 | 1,869.15 | 3,120.26 | 3,306.55 | 2,908.67 | 2,312.25 |
| 20% Corporate income Tax rate (Thailand) | (601.07) | (373.83) | (624.05) | (661.31) | (581.73) | (462.45) |
| Corporate Income Tax | (419.38) | (260.05) | (727.68) | (531.75) | (728.36) | (449.22) |
| Corporate Income Tax Rate | 14% | 14% | 23% | 16% | 25% | 19% |
Consolidated Financial Statement
Separate Financial Statement
Explanation for Differences in Corporate Income Tax and Effective Tax Rates
The Group has implemented tax procedures to ensure compliance with relevant laws. In 2022, the corporate income tax rate for the Group was 23%, falling within the range of 17% to 25% applicable to the Group. This variation in tax rates is due to the Group receiving tax privileges in various sectors. However, it’s important to note that not all expenses incurred can be classified as tax expenses, primarily stemming from differences in accounting methods compared to those used for taxation purposes.
The difference between the corporate income tax rate in Thailand (20%) and the effective tax rate is illustrated as follows:
Tax Benefits | Amount (Thousand Baht) |
|---|---|
Tax benefits from investments under the BOI ¹/ | 1,442 |
Tax Benefits Tax privileges for ocean freight business ²/ | 46,074 |
Investment Promotion Act International Business Center (IBC) ³/ | 4,600 |
Non-taxable income/expenses | Amount (Thousand Baht) |
|---|---|
Share of profit from investment in joint ventures and associates | 15,522 |
Expected Credit Loss | (35,113) |
Reduction of cost of Inventories to net realizable value | (9,650) |
Difference depreciation for tax purpose | (99,274) |
Fair value adjustment of asset from business combination | (23,523) |
Others | (46,698) |
Differences in Corporate Income Tax (20%) and Effective Tax Rates | (146,620) |
Note :
¹/ Subsidiary engaged in public transportation and bulk cargo transportation are granted promotional privileges by the Board of Investment. Significant tax benefits include exemption from corporate income tax for up to 8 years from the dates indicated below:
- Bitumen Marine Co., Ltd.: Start Date – 29 October 2015
²/ Subsidiaries in Thailand engaged in the shipping and handling of vessels enjoy exemption from corporate income tax on their income from international marine transportation as per Notification No. 72 issued by the Director-General of the Revenue Department.
³/ The company receives tax privileges for operating as an international business center, providing administrative, technical, and support services, and being classified as an international trading company. This privilege entails the reduction of the corporate income tax rate for international business center activities over 15 accounting periods, from 1 June 2019 to 31 December 2033.