Tax Strategy and Policy

Overview

LITE-ON takes priority and great effort in complying with local tax regulation of countries in which the Company and its subsidiaries operate in. Our tax policies are set based on and reflective of our business operations around the world.

Over the course of years, LITE-ON has implemented conservative tax policies, ensuring that these reflect our business activities and align with local tax regulations. Presently, the Company conducts operations in many countries and pays taxes as per local Tax Acts.

Tax Status

LITE-ON Technology Corp. is a Taiwanese company listed on Taiwan Stock Exchange. The Company applies International Financial Reporting Standards as adopted by Taiwan. In brief, enclosed below are the latest released tax information, including breakdown of income tax expenses as well both deferred tax liabilities and assets (as of 2018/12/31 consolidated financial statements).

Tax Risks

Typically, tax risks are likely to arise from situations such as unclearness and ambiguity in tax regulations (i.e. lack of clarity in China's tax treatment relating to group re-organization), different interpretations of tax regulations by governing officials (i.e. opinions of state-level and federal tax authorities often differ), ineffective implementation of tax management strategy as result of incomplete work transition between tax function members, and potential adverse impacts as result of changes in tax regulations or incentive programs.

Moreover, the above mentioned risks generally might affect companies’tax liabilities, including but not limited to corporate income tax, value-added tax, withholding tax, and other taxes, as depicted below:

  • Income Tax 圖片

  • Deferred Tax Assets and Liabilities 圖片 圖片

  • Income Statement 圖片

  • Income Tax Expenses by Region 圖片

Intercompany Transactions

LITE-ON applies arm's length principle to intercompany transaction and undertakes measures to ensure that the involving parties of these transactions are reasonably remunerated on the basis of functions and risks assumed, thus applying proper transfer pricing methods. Furthermore, transfer pricing documentations are prepared for these intra-group transactions and in accordance to local requirements of countries in which the involving respective subsidiaries are situated in.

Tax Risks

Typically, tax risks are likely to arise from situations such as unclearness and ambiguity in tax regulations (i.e. lack of clarity in China's tax treatment relating to group re-organization), different interpretations of tax regulations by governing officials (i.e. opinions of state-level and federal tax authorities often differ), ineffective implementation of tax management strategy as result of incomplete work transition between tax function members, and potential adverse impacts as result of changes in tax regulations or incentive programs.

Moreover, the above mentioned risks generally might affect companies' tax liabilities, including but not limited to corporate income tax, value-added tax, withholding tax, and other taxes, as depicted below: 圖片

Tax Strategies

LITE-ON takes priority and great effort to comply with local tax jurisdictions in which the Company and its subsidiaries operate. To effectively mitigate the risks highlighted above and to ensure tax compliance in all tax jurisdictions, our approaches are as follow:

  • Complying with local tax regulations and disclosure requirements with due care;
  • Enhancing the values created for shareholders by maintaining sound reputation as responsible tax citizen;
  • Sustaining strong technical expertise through continuous development of talents; and,
  • Executing effective risk management and control on continual basis.
  • Not engaging in tax avoidance schemes by using tax restructures and tax havens.


Corporate Governance ▸

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