HTC 2007 Annual Report Download - page 96

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AN OVERVIEW OFTHE COMPANY'S FINANCIAL STATUS
187186
23. INCOME TAX
The Basic Income Tax Act (BITA), which took effect
on January 1, 2006, requires that the basic income
tax (BIT) should be 10% of the sum of the taxable
income as calculated in accordance with the Income
Tax Act (ITA) plus tax-exempt income under the ITA
or relevant laws. The tax payable of the current year
would be the higher of the BIT or the income tax
payable calculated in accordance with the ITA.
However, if the BIT is higher than the ITA tax,
investment tax credits granted under the provisions
of other laws should not be used to deduct the
difference between the two taxes payable. The effect
of the BIT had been taken into account by the
Company in its tax calculation.
The income tax returns of HTC through 2003 had
been examined by the tax authorities while those of
Communication Global Certification Inc. had been
examined through 2005. However, HTC disagreed
with the tax authorities' assessment on its returns for
2002 to 2003 and applied for the reexamination of its
returns. Nevertheless, under the conservatism
guideline, HTC adjusted its income tax for the tax
shortfall stated in the tax assessment notices.
Under the Statute for Upgrading Industries, HTC
was granted exemption from corporate income tax,
as follows
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Sales of pocket PCs and Smartphones 2001.04.26~2006.04.25
Sales of pocket PCs (wireless) and Smartphones 2002.01.01~2006.12.31
Sales of Win CE products 2003.01.01~2007.12.31
Sales of pocket PCs, pocket PCs (wireless) and Smartphones 2004.09.15~2009.09.14
Sales of pocket PCs (wireless) and Smartphones 2004.11.30~2009.11.29
Sales of pocket PCs (wireless) and Smartphones 2005.12.20~2010.12.19
sales of wireless or smartp hone whichhas 3G or GPS function 2006.12.20-2011.12.19
VI
22. PERSONNEL EXPENSES, DEPRECIATION AND AMORTIZATION
2005 2006
NT$ NT$
Function Classified as Classified as Classified as Classified as
Expense Item Operating Costs Operating Expenses Total Operating Costs Operating Expenses Total
Personnel expenses 1,340,366 1,541,507 2,881,873 1,747,869 2,195,829 3,943,698
Salary 1,162,139 1,345,393 2,507,532 1,503,540 1,942,094 3,445,634
Insurance 62,798 74,800 137,598 70,395 87,463 157,858
Pension 41,624 54,554 96,178 35,036 64,505 99,541
Others 73,805 66,760 140,565 138,898 101,767 240,665
Depreciation expense 369,120 231,356 600,476 384,241 254,112 638,353
Amortization 7,830 36,268 44,098 7,319 33,197 40,516
2007
Function NT$ US$(Note 3)
Classified as Classified as Classified as Classified as
Expense Item Operating Costs Operating Expenses Total Operating Costs Operating Expenses Total
Personnel expenses 2,026,408 3,254,586 5,280,994 62,487 100,357 162,844
Salary 1,740,812 2,848,099 4,588,911 53,679 87,823 141,502
Insurance 80,707 163,098 243,805 2,489 5,029 7,518
Pension 45,258 91,282 136,540 1,396 2,815 4,211
Others 159,631 152,107 311,738 4,923 4,690 9,613
Depreciation expense 393,581 287,676 681,257 12,136 8,871 21,007
Amortization 14,006 37,856 51,862 432 1,167 1,599
FINANCEI CONSOLIDATED REPORT
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