Tax Strategy
Challenges and Commitments
GGC conducts business with the commitment of transparency and adheres to the principles of accuracy, transparency, verifiability and awareness of duties and responsibilities in relation to tax operations to build trust and maximize benefits to stakeholders related to the Company's business operations. This is sustainable in the long term. The company has prepared a tax policy under good corporate governance and operates its tax strategy efficiently, consisting of 3 pillars: Tax Ethics, Tax Risk Management, and Tax Transparency.
Key Stakeholders
Shareholder, Investor and Analyst
Customer
Government
Supplier and Business Partner
Community, Social and Environment
Tax Strategy Guidelines
GGC has formulated a tax policy to supervise risk management and disclose tax information with transparency, consistent with the Company’s strategy and business goals.
Tax Transparency
GGC publicly reports on the following for each tax jurisdiction in which we operate, which consists of the Company’s revenue, earning before tax, and corporate income tax paid as follows:
Corporate Income Tax Payment for 2023 (million THB)
*100% of revenue comes from Thailand.
** Sales and service income
*** Operating Profit before tax
GGC is engaged in primary activities in the Oleochemical Industry, with its main production base located in Thailand. In addition, it also cooperates with associates / business partners in various business operations to support future business expansion, which the Company is committed to supervising to ensure that associates and business partners will conduct business in accordance with the Company's set tax practices.
GGC Group's Main Business Units and Primary Activities
| Thailand | Business Activities |
|---|---|
| Global Green Chemicals Public Company Limited | Production, distribution and transportation of oleochemical products |
| Subsidiaries | |
| Thai Fatty Alcohols Co., Ltd. | Production and distribution of biochemical and fatty alcohols products |
| GGC Biochemical Co., Ltd. | Holding and operating local business |
| Joint venture | |
| Thai Ethoxylate Co., Ltd. | Production and sale of Fatty Alcohol Ethoxylates |
| Indirect joint venture | |
| GGC KTIS Bioindustrial Co., Ltd. | Production and distribution of electricity and ethanol from sugarcane |
In addition, the Company has disclosed the Reported Tax Rates and Actual Tax Rates in 2022 and 2023 as follows:
Unit: Million THB
| Details | 2022 | 2023 | Average |
|---|---|---|---|
| Earning (loss) before Tax | 1,089 | (120) | - |
| Reported Tax | 136 | 82 | - |
| Reported Tax Rate (percent) | 12.49 | (68.33) | (27.92) |
| Cash Taxes Paid | 33.29 | 120 | - |
| Cash Tax Rate (percent) | 3.06 | (100) | (48.47) |
In this regard, GGC properly manages corporate income tax according to Thai law. In 2023, the Company has a reported tax rate of (68.33) and the actual tax paid of (100), which is lower than domestic rate of 20 percent, according to law. This is because the Company received the privilege of corporate income tax exemption and Single Jurisdiction Tax Code from the Board of Investment of Thailand (BOI). The Company has received tax exemption privileges in 1 main area:
Unit: Million THB
| Details | Rate | 2022 | Rate | 2023 |
|---|---|---|---|---|
| Operating profit before tax | 1,089 | (120) | ||
| Income tax using the corporate income tax rate of Thailand. | 20% | 218 | 20% | (24) |
| Non-Taxed Income | - | - | ||
| Additional deductible expenses | (115) | (7) | ||
| Accumulated tax loss (Refers to Timing-Issues outside of the two years period) | 16 | 92 | ||
| Expenses that are not subject to taxation | 24 | 5 | ||
| Share of profit from investments in joint ventures | (9) | 17 | ||
| List of temporary differences | - | - | ||
| Others | 2 | (1) | ||
| Total | 12.49% | 136 | (68.33%) | 82 |
Notes:
In 2023, Net Operating Loss entitled to tax exemption privileges is accounted for 306 million THB which stems from the operating loss from 2nd Methyl Ester Plant of 194 million THB. In addition, GGC had the operating loss from the investment promotion of effectiveness of the machinery performance of the 1st Methyl Ester Plant of 174 million THB. However, GGC generated net operating gain from “the Investment Promotion Certificate” tax exemption from the investment of the 2nd Glycerin Plant of 62 million THB, with explanation as follows.
- Income exempt from tax from BOI privileges in the amount of 7,241 million THB and 8,852 million THB in 2022 and 2023, respectively.
- The result of the deduction of expenses / income from tax privileges for investment promotion under the Revenue Code and the Investment Promotion Act in the amount of 47 million THB and 193 million THB in 2022 and 2023, respectively.