Tax Strategy
GGC conducts business while adhering to the principles of righteousness, transparency, accountability and awareness in tax-related roles and responsibilities in order to sustainably create trust and utmost benefit for stakeholders in the long run. GGC has established and efficiently implemented a tax policy under corporate governance principles. Such policy consists of three key pillars, namely tax ethics, tax risk management and tax transparency
Tax Strategy Guidelines
GGC has established a tax policy to supervise risk management and disclose tax information with transparency, in line with the company's strategy and business goals.
Tax Transparency
GGC has disclosed information on the annual payment of corporate income tax in the country where GGC’s business operates. This consists of the total income, operating profit, and the corporate income tax as seen in the tables below.
Corporate Income Tax Payment for 2021 (million THB)
** Revenue from sales and services
*** Profit before taxes
GGC's core business is in the Oleochemical Industry with key production base in Thailand. In addition, the company also collaborates with associates/suppliers to operate businesses in support of future business expansions. GGC is committed to governance in ensuring that associates and suppliers operate in accordance with the company’s established tax guidelines.
GGC Group's Main Business Units and Activities
| Thailand | Business Activities |
|---|---|
| Global Green Chemicals Public Company Limited | Production, distribution and transportation of oleochemical products |
| Subsidiaries | |
| Thai Fatty Alcohols Co., Ltd. | Manufacturing and distributing biochemical products |
| GGC Biochemical Co., Ltd. | Holding company and local business operations |
| Joint ventures | |
| Thai Ethoxylate Co., Ltd. | Manufacturing and distributing chemical and ethoxylate products, such as Fatty Alcohol Ethoxylate |
| Indirect joint ventures | |
| GGC KTIS Bioindustrial Co., Ltd. | Manufacturing and distribution of biofuels |
In addition, GGC disclosed the reported tax rates and the actual tax rates paid in 2020 and 2021 as follows:
Unit: million THB
| Details | 2020 | 2021 | Average |
|---|---|---|---|
| Earnings before taxes | 575 | 421 | - |
| Reported taxes | 15 | 91 | - |
| Reported tax rate (percent) | 2.61 | 21.62 | 10.65 |
| Cash taxes paid | 2.36 | 13.72 | - |
| Cash tax rate (percent) | 0.41 | 3.26 | 1.61 |
GGC properly manages corporate income tax under Thai law. In 2021, GGC had an average reported tax rate of 21.62% and an actual tax rate of 3.26%, which is lower than the actual corporate income tax rate of 20%, according to the Thai law, because GGC received special privileges for corporate income tax exemption and reduction from the Board of Investment of Thailand (BOI) in three main areas:
Unit: million THB
| Details | Rate | 2020 | Rate | 2021 |
|---|---|---|---|---|
| Profit before taxes | 575 | 421 | ||
| Income tax using Thai corporation tax rate | 20% | 115 | 20% | 84 |
| Income not subjected to taxes | (78) | (65) | ||
| Expenses deductible at a greater amount | (41) | (33) | ||
| Utilization tax losses | (35) | (58) | ||
| Expenses not deductible for tax purposes | 54 | 127 | ||
| Share of net profits from investments in an associate or joint venture | (12) | (15) | ||
| Temporary difference | 15 | 46 | ||
| Others | (3) | 5 | ||
| Total | 2.61% | 15 | 21.62% | 91 |
Note
Profit from tax-exempted operations amounted to 325 million THB, which can be explained as follows:
- Revenue exempted from tax under BOI’s incentive scheme was worth 17,316 million THB and 6,666 million THB in 2020 and 2021, respectively.
- Result of expense deduction / revenues that benefit from tax incentive scheme to promote investment under the Revenue Code and the Investment Promotion Act amounted to 153 million THB and 43 million THB in 2020 and 2021, respectively.