Shareholder Rights and Tax management

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 2022 to 2023 (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.
In 2023, the majority of revenue and income tax paid of CSC Group are from Taiwan accounting for 89%. The average effective tax rate and average cash tax rate were 22.70% and 63.44% respectively. The average effective tax rate is slightly higher than the statutory tax rate of 20% in Taiwan. The average cash tax rate is higher than the legal tax rate due to higher net profit before tax in 2022, resulting in higher income tax for 2022 paid in 2023.
In 2023, the average effective tax rate and average cash tax rate may be higher than the industry average effective tax rate and cash tax rate based on CSA Handbook in the “Materials” industry group, and the reason is timing difference that income tax accrued will be filed and paid in the following year in Taiwan, especially CSC Group's profits fluctuate because of the business cycle which may lead to a higher cash tax rate as more tax paid in 2023 due to higher profits in 2022.