Shareholder Rights and Tax management
CSC seeks to improve tax risk management and is committed to promoting information transparency and compliance with regulations. At the same time, it supports government-promoted preferential tax policies, promotes local economic development and industrial innovation policy vision to fulfill corporate social responsibility and achieve sustainable development.
In 2025, CSC Group's operational performance was significantly impacted by sluggish demand in the global steel market and the implementation of reciprocal tariffs by the United States. These external macroeconomic headwinds led to a consolidated net loss before Income Tax of NT$ 4.685 billion.
Considering the timing differences between income tax expenses accrued and income taxes paid, the 2-year average effective tax rate and 2-year average cash tax rate for the period from 2024 to 2025 (hereinafter referred to as “average effective tax rate” and “average cash tax rate”) of CSC Group are applied below to more appropriately explain CSC Group's tax responsibility.
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Regional Influence and Statutory Compliance
In 2025, the majority of CSC Group's revenue and income tax payments continued to be generated and made in Taiwan, accounting for 88% and 75% respectively. Consequently, the effective tax rate and cash tax rate remain primarily influenced by the statutory tax rate and tax payment schedule in Taiwan. -
Effective Tax Rate Analysis
The average effective tax rate for 2025 was 25.14%, which is higher than the statutory rate of 20%. This increase was primarily attributable to the recognition of income tax benefits and adjustments to temporary differences (such as deferred tax assets) under a consolidated net loss position, in accordance with applicable accounting standards. -
Cash Tax Rate Analysis
The average cash tax rate for 2025 stood at -31.18%. This negative figure resulted from a specific operational context: while the Group reported a consolidated net loss due to significant challenges faced by a few subsidiaries, the majority of the Group's operating entities remained profitable and fulfilled their tax obligations. This demonstrates CSC Group's commitment to tax compliance and its continuous fiscal contribution to the government despite a fluctuating economic environment. -
Industry Benchmarking (CSA Materials Sector)
According to the industry standards for the “Materials” sector as published in the CSA Handbook, CSC Group's average effective tax rate in 2025 was higher than the industry average. Conversely, the average cash tax rate was lower than the industry average. This discrepancy is primarily due to tax regulations that limit the offsetting of gains and losses between different legal entities, leading to substantial cash tax payments even amidst a consolidated net loss, which mathematically lowered the resulting cash tax rate.
| CSC and its Subsidiaries | |||
|---|---|---|---|
| Years | 2024 | 2025 | The average of the recent two years (Note 1) |
| Profit (loss) before Income Tax | 45.78 | -46.85 | |
| Income Tax Expense (revenue) | 7.02 | -11.78 | |
| Effective Tax Rate | 15.33% | 25.14% | 444.86% |
| Income Taxes Paid (Note 2) | 23.52 | 14.61 | |
| Cash Tax Rate | 51.38% | -31.18% | -3563.55% |
- Note1：The consolidated net profit before tax for 2024 was NT$ 4.578 billion, while the consolidated net loss before tax for 2025 was NT$ 4.685 billion. This results in a two-year aggregate pre-tax loss of only NT$ 0.0535 billion. When calculating the 2-year average effective tax rate and average cash tax rate, using this exceptionally small aggregate figure as the denominator leads to mathematical distortion.
- Note2：The discrepancy in 2025 tax metrics is due to the inherent timing difference between profit recognition and tax settlement. While CSC and its Subsidiaries reported a net loss before tax of NT$ -4.685 billion in 2025, the cash tax payment of NT$ 1.461 billion primarily relates to the settlement of taxes incurred from the profitable 2024 fiscal year.
