Tax Strategy

Coway faithfully fulfills its tax obligations based on a rational tax strategy.

Establish and comply with tax reporting and taxation policies.

The Board shall provide documented policies on overall risk management as well as specific areas such as foreign exchange risk, interest rate risk, credit risk, use of derivatives and non-derivative financial instruments and investments in excess of liquidity do.

Information related to corporate tax is disclosed through the Audit Report and the Sustainability Report on the Electronic Disclosure System of the Financial Supervisory Service.

Coverage

Coway contributes to creating a virtuous cycle structure by increasing the tax revenue and public service of the government and maximizing shareholder profit by faithfully fulfilling the duty of the corporation not only in domestic but also overseas. Coway has subsidiary in Malaysia, the United States, and China, etc. We comply with the applicable national tax laws and OECD pricing guidelines for international transactions with overseas corporations and fulfill local taxation obligations.

Tax Reporting

In order to fulfill its duty to pay sincerely, Coway transparently discloses the tax information specified by the tax law (http://dart.fss.or.kr/). We also ensure transparency and objectivity through external audits. In the financial statements and notes in the audit report, information such as tax base cost calculation standard, deferred tax asset and liability, income tax expense structure and tax rate can be checked.

Taxation Governance & Risks

Coway continuously monitors tax regulations and governmental policies in order to understand and manage tax risks. Risk management is carried out by the finance department according to the policy approved by the board of directors. The Funds Department works closely with the consolidation companies to identify, assess and avoid financial risks. The Board provides documented policies on overall risk management, as well as documented policies on specific areas such as foreign exchange risk, interest rate risk, credit risk, use of derivatives and non-derivative financial instruments and investments in excess of liquidity. On the other hand, as the National Tax Service recently responds strictly to the tax evasion of the off-shore tax evasion and the international trade use tax evasion, and encourages the support of good faith reporting related to international transactions.

Domestic and Overseas Tax Payment (Consolidated)

Domestic (Unit: One Thousand Won)

Domestic and Overseas Tax Payment (Consolidated) Infomation

Category	2015	2016	2017
Income tax paid1)	107,454,861	97,024,176	113,896,788
Deferred tax changes due to a temporary difference2)	3,045,843	(16,505,349)	1,611,952
Income tax expenses directly included in capital	842,330	(76,135)	(2,659,082)
Income tax3)	111,343,034	80,442,692	112,849,658

• 1)Income tax paid : Current corporate taxes
• 2)Deferred tax : Expected amount of deferred tax changes due to a temporary difference between accounting income and taxable income
• 3)Income tax expenses : Current income taxes + Deferred income tax

Overseas (Unit: One Thousand Won)

The amount of tax payment at overseas sites is as follows.

Overseas Information

Category	2015	2016	2017
Asia	142,607	(938,054)	6,394,411
The Americas	4,865	13,574	13,458
Other Areas	31,442	0	-