Tax Policy

Eurocharm supports tax policies and incentives that encourage enterprise innovation and foster economic growth. The Company aims for its tax approach and disclosure to be transparent and sustainable in the long term.

Eight Commitments

  • Act at all times in compliance with all applicable laws and regulations.
  • Inter-company transactions are based on the arm’s length principle, in compliance with internationally accepted transfer pricing guidance published by the OECD.
  • Be transparent in financial reporting. Disclosures are made in accordance with applicable regulations and reporting requirements.
  • Do not use tax havens or tax structures whose sole purpose is for tax avoidance.
  • Do not transfer value created to low-tax jurisdictions.
  • Develop strong, mutually respectful relationships with tax authorities based on transparency and trust.
  • Always consider tax as part of major business decisions.
  • Analyze the operating environment and assess tax risk through a corporate management mechanism.

Tax Risk Management

Eurocharm is subject to tax laws and regulations in various jurisdictions in which it operates or conducts business. Any unfavorable changes in tax laws and regulations in these jurisdictions could increase the Company’s effective tax rate and have an adverse effect on its operating results. In order to effectively manage tax risks, Eurocharm follows internal control processes, identifies, assesses, and manages tax risks from regulatory changes and its business transactions, accounts for them appropriately, and implements and monitors controls over them.

Tax Governance

The ultimate responsibility for taxation management for Eurocharm and its subsidiaries rests with the Chief Financial Officer, who delegates day-to-day responsibility to the Controller. A team of qualified and experienced tax professionals supports the Controller to meet Eurocharm’s tax obligations. In addition, Eurocharm also leverages external tax service providers for complementary expertise. Eurocharm’s Audit Committee is delegated by the Board to oversee the quality and integrity of the accounting, auditing, reporting, and financial control practices of the Company through periodic review of certain major matters, including accounting policies and procedures, internal control systems, legal compliance, and corporate risk management, etc. Among these, tax compliance is included as part of the Company’s legal compliance.

Effective Tax Rate

The effective tax rates for 2022 and 2021 are 16.87% and 17.28%, respectively. The average tax rate for 2021 is lower than the Company’s operating site tax rate and the statutory income tax rate of 20% in the R.O.C. due to the preferential rental tax rate for KCN Khai’s 5 plant and Baishan II Industrial Zone.

Summary of Audit Committee Operations

The Audit Committee of the Company was established on June 21, 2013, and its members are three independent directors. All members elected an independent director as the convener and chairman of the meeting. Currently, independent director Jen-Tien Yuan serves as the convener and chairman of the meeting. The Audit Committee operates in accordance with the Company’s “Rules and Regulations of the Audit Committee” and reviewes and decides the following matters: the Company’s financial statements, the Company’s auditing and accounting policies and procedures, the Company’s internal control system, significant asset or derivative transactions, the raising or issuance of marketable securities, the appointment, dismissal or compensation of certified public accountants, and the appointment or removal of financial, accounting or internal auditing officers. The independent directors, accountants, and supervisors of auditors and auditors conduct regular meetings at the audit committee meeting at least once a year. The Audit Committee held seven meetings in 2022, with an average attendance rate of 100%, and discussed a total of 27 audit-related motions.

On October 4, 2021, Ernst & Young Business Advisory Services Inc. was commissioned to conduct the “2021 Annual External Board Performance Evaluation.” On November 2, 2021, the “2021 Annual Board Member Self-Assessment” and “Functional Committee Member Self-Assessment” were conducted. The evaluation results for all assessments were considered “satisfactory,” and all the specified indicators were duly completed. The result was presented at the Board meeting on February 25, 2022. For more details, please refer to the Board Performance Evaluation Report (including the Functional Committee Performance Evaluation). On December 30, 2022, the “2022 Annual Board Internal Performance Evaluation and Board Member Self-Assessment” and “Functional Committee Member Self-Assessment” were conducted. The evaluation results were considered “satisfactory”, which is expected to be reported on the Board Meeting of the first quarter of 2023.

TitleNameExperience (Education)
ChairmanChen-Tien YuanLaw-National Taiwan University
MBA, Guanghua School of Management, Peking University
Vice President, EY Management Services Inc.
Partner, Yuan, Chen & Partners Attorneys-at-Law
Supervisor, Wenetgroup Ltd.
Director, Yuan Chen Asset Management Co., Ltd.
Independent DirectorYen-Hsi LinBachelor Degree in Philosophy, Fu Jen Catholic University
General manager of Taiwan Branch of DDI-Asia/Pacific International Ltd., and consultant for directors of branches around the globe
Independent Director of Eurocharm Holdings Co., Ltd.
Independent Director of Entire Technology Co., Ltd.
Director (Legal representative) of iMotion Inc.
Director of Teach For Taiwan Education Foundation
Independent DirectorYi-Jen KuoTransportation Engineering and Management, National Chiao Tung University
Administrator, China Steel Corporation
Manager, China Steel
Aluminum Corporation
President, China Steel Global Trading Corporation
Advisor, China Steel Global Trading Corporation
Number of MeetingsTimes597
Attendance Rate%93.33100100
Consideration of MotionsPieces101717
DateContentOpinions and Suggestions
2022.02.251.Proposal to approve business report and consolidated financial statements of 2021
2.Distribution of earnings
3.Self-assessment result report of the internal control system of 2021 and discussion of the Statement of Internal Control System
4.The Company’s endorsement and guarantee for the affiliated companies
Unanimous consent
2022.03.251.Loan of the Company’s funds
2.The plan to issue the Company’s first unsecured convertible corporate bonds in Taiwan
Unanimous consent
2021.04.181.Replacement of the signing accountant due to internal job rotation at Ernst & Young Accounting Firm
2.The Company’s endorsement and guarantee for the affiliated companies
Unanimous consent
2021.06.101. The Company’s endorsement and guarantee for the affiliated companies
2. Loan of the Company’s funds
Unanimous consent
2021.08.161. Proposal to approve the financial statements of 2022 Q2
2. The Company’s endorsement and guarantee for the affiliated companies
3. Change in the Company’s loan of funds
4. Loan of the Company’s and the affiliated company’s funds
Unanimous consent
2021.11.01The Company’s endorsement and guarantee for the affiliated companiesUnanimous consent
2022.12.301.Appointment of Ernst & Young LLP as an Independent Accountant for the Company’s 2023 Financial Statement
2.The Company’s endorsement and guarantee for the affiliated companies
Unanimous consent