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Tax Governance
Tax Governance
D-Link Group adheres to the goal of implementing tax compliance and improving tax risk management. D-Link Group establishes Group Tax Policy and Management Regulation to implement corporate sustainability development and fulfill social responsibilities. According to D-Link Group’s Group Tax Policy and Management Regulation, the Group takes the Board of Directors as the highest decision maker of effective tax risk management mechanism. In order to put tax management into practice and establish internal tax management mechanism, the company hired tax experts to provide tax education training and tax consulting services to maintain the accuracy of tax compliance.
D-Link Group is subject to tax laws and regulations in various jurisdictions, in which it operates or conducts business. Any unfavorable changes of tax laws and regulations in these jurisdictions could have an adverse effect on its operating results. Therefore, the company regularly analyzes changes of tax regulations of each jurisdiction, continuously evaluates the local tax laws and regulations, and the recent supervision priorities of the local tax authorities to identify the tax risks arising from jurisdictions. Accounting Division of the Corporate Finance and Operation Center regularly reports the Group tax risk environment, risk assessment and response measures to the top management. Starting from 2023, tax risk management was incorporated into risk management, and reported the status of tax management to the Board of Directors annually.
Tax Governance and Transfer Pricing Policy
- Compliance Principle
Commitment to comply with tax regulations in all operating regions and to declare taxes honestly. - Risk Control
Analyze the operational environment and utilize administrative mechanisms to assess tax risks and countermeasures. - Reasonable Tax Incentives
Apply for tax incentives based on commercial reasons and in line with economic substance regulations without using tax havens. - Reasonable Structure
Ensure the enterprise architecture and transaction arrangements are in line with economic substance regulations. No special arrangements shall be used to avoid tax. - Information Transparency
Financial information is disclosed transparently, and tax information is disclosed in accordance with related regulations and standards. - Integrity in Communication
Establish a relationship of mutual respect and honest communication. - Arm’s Length Principle for Related-Party Transactions
In compliance with internationally accepted transfer pricing guidelines announced by the Organization for Economic Cooperation and Development (OECD).
Compliance with Global Transfer Pricing
In response to the international requirements of the three-tiered transfer pricing documentation framework, D-Link Group prepared Master Files and complied with regulatory declaration to enhance the transparency of the tax information of the Group and implement global transfer pricing.
D-Link Group’s companies registered in the Cayman Islands and the British Virgin Islands act as holding companies, which are for the purpose of holding shares. If there is any surplus distribution of the reinvestment company hold by the holding company, the holding company will remit such surplus to the ultimate parent company, D-Link Corporation, and pay corresponding income tax in Taiwan.
Country-by-Country Tax Information for 2022 and 2023
Net Revenue
Profit (Loss) Before Tax
Income Tax Expense
Income Tax Paid
Effective Tax Rate
The average adjusted effective tax rate of D-Link Group in the two-year period was 26% and cash tax rate of D-Link Group in the two-year period was 28%, which were higher than “Technology Hardware & Equipment” group averages (the average effective tax rate 22.5% and the average cash tax rate 24.35%) announced by CSA Handbook, since statutory tax rates of most overseas subsidiaries (such as Italy, France, Spain, India and Japan, etc.) are higher than 24%.
Unit: NTD million
2023 | 2022 | Average | ||
|---|---|---|---|---|
Profit before tax (a) | 861 | 458 | 660 | |
Reported taxes (b) | 163 | 197 | 180 | |
Deduct: temporary difference | (44) | 56 | 6 | |
Adjusted reported taxes (e) | 207 | 141 | 174 | |
Effective tax rate (c)=(b)/(a) | 19% | 43% | 27% | |
Adjusted effective tax rate (d)=(e)/(a) | 24% | 31% | 26% | |
Income tax paid (f) | 248 | 126 | 187 | |
Cash tax rate (g)=(f)/(a) | 29% | 28% | 28% |
Income and Tax in the Respective Tax Jurisdiction in 2023
Unit: NTD million
Tax Jurisdiction | Net Revenue | Profit (Loss) before tax | Income tax PAID (ReFUND) | Income Tax ACCRUED | Number of employees |
|---|---|---|---|---|---|
| Taiwan | 7,190 | 564 | 45 | 0 | 1,033 |
| India | 4,579 | 444 | 123 | 114 | 0-300 |
| UAE | 2,707 | 15 | 0 | 0 | 0-300 |
| Singapore | 854 | 54 | 1 | 2 | 0-300 |
| Russia | 1,615 | -60 | 55 | 54 | 0-300 |
| UK | 636 | -359 | 0 | 0 | 0-300 |
| Germany | 599 | 11 | 0 | 0 | 0-300 |
| Japan | 854 | 12 | 9 | 2 | 0-300 |
| Italy | 487 | 7 | 13 | 0 | 0-300 |
| USA | 789 | -143 | 0 | 0 | 0-300 |
| France | 386 | 2 | 2 | 2 | 0-300 |
| Canada | 228 | -67 | -5 | 0 | 0-300 |
| Australia | 273 | -24 | -1 | 0 | 0-300 |
| Spain | 313 | 5 | 1 | 1 | 0-300 |
| Brazil | 3 | 2 | 0 | 0 | 0-300 |
| China | 1,460 | 118 | 2 | 2 | 0-300 |
Korea | 61 | -13 | 0 | 0 | 0-300 |
| Republic of Moldova | 5 | 1 | 0 | 0 | 0-300 |
| B.V.I | 0 | 440 | 0 | 0 | 0-300 |
| Mauritius | 0 | 163 | 3 | 3 | 0-300 |
| Sweden | 47 | 0 | 0 | 1 | 0-300 |
| Poland | 67 | 2 | 0 | 0 | 0-300 |
| Chile | 0 | 0 | 0 | 0 | 0-300 |
| Netherlands | 13 | -2 | 0 | 0 | 0-300 |
| Peru | 5 | 0 | 0 | 0 | 0-300 |
| Lithuania | 17 | 4 | 0 | 0 | 0-300 |
Hungary | 8 | -2 | 0 | 0 | 0-300 |
Czech Republic | 10 | -1 | 0 | 0 | 0-300 |
Mexico | 0 | -1 | 0 | 0 | 0-300 |
Malaysia | 12 | 1 | 0 | 0 | 0-300 |
Philippines | 12 | 0 | 0 | 0 | 0-300 |
| Colombia | 5 | 1 | 0 | 0 | 0-300 |
| Cayman Islands | 0 | 116 | 0 | 0 | 0-300 |
Ukraine | 5 | -2 | 0 | 0 | 0-300 |
Kazakhstan | 2 | 0 | 0 | 0 | 0-300 |
The Group Entities and the Major Business Operation Across Tax Jurisdictions in 2023
Company Name | Tax Jurisdiction | Business Description |
|---|---|---|
D-Link Corporation | Taiwan | R&D, trading of network equipment and wireless communication systems, sales and after-sales service |
D-Link Taiwan Investment Co., Ltd. | Taiwan | Investment |
| D-Link Canada Inc. | Canada | Sales and after-sales service |
| D-Link Systems, Inc. | USA | Sales and after-sales service |
| D-Link Holding Company Ltd. | B.V.I | Investment |
| D-Link (Europe) Ltd. | UK | Sales and after-sales service |
| D-Link AB | Sweden | Sales and after-sales service |
| D-Link (Magyarorszag) Kft | Hungary | Sales and after-sales service |
| D-Link France SARL | France | Sales and after-sales service |
| D-Link Polska Sp Z.o.o. | Poland | Sales and after-sales service |
| D-Link Iberia SL | Spain | Sales and after-sales service |
| D-Link s.r.o | Czech Republic | Sales and after-sales service |
| D-Link (Netherlands) BV | Netherlands | Sales and after-sales service |
| D-Link Mediterraneo SRL | Italy | Sales and after-sales service |
| D-Link (Deutschland) GmbH | Germany | Sales and after-sales service |
| D-Link (Holdings) Ltd. | UK | Investment |
| D-Link (UK) Ltd. | UK | Investment |
| D-Link Adria d.o.o | Croatia | Sales and after-sales service |
| OOO D-Link Russia | Russia | After-sales services |
| Success Stone Overseas Corp. | B.V.I | Investment |
| D-Link Holding Mauritius, Inc. | Mauritius | Investment |
| D-Link (India) Ltd. | India | Sales and after-sales service |
| Team F1 Networks Private Limited | India | R&D |
| D-Link Shiang-Hai(Cayman) Inc. | Cayman Islands | Investment |
D-Link (Shanghai) Co., Ltd. | China | Sales and after-sales service |
Netpro (Shanghai) Co., Ltd. | China | R&D and trading |
| D-Link International Pte. Ltd. | Singapore | Sales and after-sales service |
| D-Link Korea Limited | South Korea | Sales and after-sales service |
| D-Link Trade M S.R.L | Republic of Moldova | Sales and after-sales service |
D-Link Capital Investment Co. Ltd. | B.V.I | Investment |
| D-Link Malaysia Sdn Bhd | Malaysia | Sales and after-sales service |
D-Link Sudamerica SpA | Chile | Sales and after-sales service |
| D-Link Mexicana S.A de C.V | Mexico | Sales and after-sales service |
| D-Link Japan K.K. | Japan | Sales and after-sales service |
| D-Link Australia Pty Ltd. | Australia | Sales and after-sales service |
D-Link Middle East FZE | UAE | Sales and after-sales service |
| D-Link Brazil LTDA. | Brazil | Sales and after-sales service |
| D-Link Investment Pte. Ltd. | Singapore | Investment |
| OOO D-Link Trade | Russia | Sales and after-sales service |
| D-Link Latin-America Company Ltd. | Cayman Islands | Investment |
| D-Link Peru S.A. | Peru | Sales and after-sales service |
| D-Link de Colombia S.A.S. | Colombia | Sales and after-sales service |
| D-Link Guatemala S.A. | Guatemala | Sales and after-sales service |
D-Link Service Lithuania, UAB | Lithuania | After-sales services |
D-Link Service (Ukraine) | Ukraine | Sales and after-sales service |
D-Link Service (Kazakhstan) | Kazakhstan | Sales and after-sales service |
Cameo Communications, Inc. | Taiwan | Manufacturing, sales, R&D |
Qianjin Investment Co., Ltd. | Taiwan | Investment |
Huge Castle Ltd | Samoa | Investment |
Perfect Choice Co., Ltd. | Mauritius | Investment and trading |
Luis Jo’se Investment Inc. | B.V.I | Investment |
Suzhou Soarnex Technology Co., Ltd | China | Software development and software service for computer information systems |