Taxation
Tax Governance
Osotspa Group is committed to being a taxpayer who not only cooperates and complies with the tax laws of the countries in which it operates, but also with the intent of those related laws.
The Company calculated the transfer price for transactions between the Company and associated companies based on the (Arm's Length Principle) which requires compliance with applicable laws and regulations. The aim is to pay the fair amount of tax based on the actual value of routine business operations.
In terms of tax planning, the Company follows commercial business practices without abusing the tax structure to evade taxes or engaging in fraudulent, unusual transfers of profits to non-disclosed countries or territories (Tax heaven).
The company is accountable for effective financial management and tax operations in order to promote corporate sustainability and create shareholder value. On top of that, the company seeks legitimate tax benefits to be used in its business.
For example, tax deduction measures, investment tax benefits, and the full utilization of deferred tax assets.
Tax Risk Management
The Company manages tax risks through its compliance system and promptly prepares measures to mitigate the impact of assessed risks. Processes are tracked and reported to the Risk Management Committee. Osotspa also allocates resources to understanding its tax obligations and complying with applicable tax laws and regulations.
To fully understand the risks and implications of critical tax issues, the Company always seeks advice from relevant tax authorities or experts. The Company monitors government policy from the concept stage of drafting until the issuance of tax laws in order to keep up with the impact on the Companys business.
Tax Reporting (by country) **
Unit : THB Million
| Country of Operation* | 2023 | ||||
|---|---|---|---|---|---|
| Number of employees (persons) | Total Revenue | Profit/(Loss) before tax | Income tax accrued (current year) | Income tax paid (cash basis) | |
| Thailand | 2,890 | 23,531.0 | 2,564.0 | 378.2 | 896.8 |
| Overseas | 281.0 | 3,113.3 | 289.6 | 52.3 | 39.7 |
| Total | 3,171 | 26,644.3 | 2,853.6 | 430.5 | 936.5 |
- OSP Group complies with the laws and regulation announced by the Revenue Department.
- OSP Group do not receive any subsidies from the Government.
- There is different in sales classification between Tax report and 56-1 one reports. Tax report classifies sales based on tax jurisdiction in which our company operates its primary activities, which may be different from 56-1 one report, which refers to geographic footprint where revenues were generated.
- Total revenue is calculated as the sum of all revenues from sales and services, investment income, and other income within the respective country in consistent with Osotspa group’s financial statements consolidated basis.
* These countries represent where OSP Group has our production units.
** The financial information in the above table is consistent with OSP Group Consolidated Financial Statements
OSP group’s effective tax rate reconciliation has shown with explanation as follows:
Unit : THB Million
| Reconciliation of effective tax rate | Consolidated financial statements | |||
|---|---|---|---|---|
| 2022 | 2023 | |||
| Rate Rate (%) | Rate Rate (%) | |||
| Profit before income tax expense | 2,292.73 | 2,853.64 | ||
| Income tax using the Thai corporation tax rate | 20.00 | 458.55 | 20.00 | 570.73 |
| Effect of different tax rates in foreign jurisdictions | 4.25 | 7.04 | ||
| Share of (profit) loss of joint ventures and associates accounted for using equity method | (62.98) | (29.11) | ||
| Income not subject to tax | (38.69) | (130.87) | ||
| Additional deductible expenses for tax purposes | (39.38) | (37.12) | ||
| Expenses not deductible for tax purposes and others | 15.30 | 27.02 | ||
| Recognition of previously unrecognised tax losses | 0.00 | (28.78) | ||
| Current year losses for which no deferred tax asset was recognised | 31.81 | 51.59 | ||
| Total | 16.09 | 368.86 | 15.09 | 430.51 |
OSP Group's effective tax rate for the fiscal years 2022 and 2023 were at 16.09% and 15.09% respectively, comparing with Thailand corporate income tax rate at 20%
- Effect of different tax rates in foreign jurisdictions amounted to THB 4.25 Million and THB 7.04 Million in 2022 and 2023, respectively.
- Share of (profit) loss of joint ventures and associates accounted for using equity method amounted to THB (62.98) Million and THB (29.11) Million in 2022 and 2023, respectively.
- Income not subject to tax amounted to THB (38.69) Million and THB (130.87) Million in 2022 and 2023, respectively, mainly from BOI tax privilege and tax exemption on dividends received by OSP (a listed company in stock exchange of Thailand), when the shares were held at least three months before and after the dividends received.
- Additional deductible expense for tax purposes amounted to THB (39.38) Million and THB (37.12) Million in 2022 and 2023, respectively, mainly from double deduction from investment in machinery, training for employees and donation.
- Expenses not deductible for tax purposes and others amounted to THB 15.30 Million and THB 27.02 Million in 2022 and 2023, respectively, mainly from the booking of leasing transactions according to accounting standard, while the Thai Revenue Department allowed such expenses according to the agreement.
- Recognition of previously unrecognised tax losses amounted to THB (28.78) Million in 2023 from the utilization taxable losses from previous periods in the current period.
- Current year losses of which no deferred tax asset was recognised amounted THB 31.81 Million and THB 51.59 Million in 2022 and 2023, respectively.