Sustainability

Business Principles

 

Since information disclosure assessment was launched by Securities & Futures Institute in 2004, Chunghwa Telecom (CHT) has been rated A++ and ranked among the top 10 in every year. CHT’s common shares are traded on the Taiwan Stock Exchange (2412) and CHT’s ADRs are traded on the New York Stock Exchange under the symbol CHT.  As such, CHT must abide both the domestic Taiwan and the foreign regulations governing information transparency and fair disclosure, which include the spokesperson system, material information disclosure as required in a timely manner, as well as accurate and comprehensive information publication on CHT’s corporate website. All information of interest to the investment community is made publicly available simultaneously in Taiwan and overseas to offer investors comprehensive and real-time financial and business information of the Company. 

Abiding by the Code of Conduct

The “Chunghwa Telecom Corporate Code of Ethics" defines the responsibilities CHT has in conducting business. The Code of Ethics clearly outlines the ethical standards and responsibilities required of directors, supervisors, executive officers and all employees while engaging in business practices. The Code of Ethics applies to individual employees and groups and the entire corporation when dealing with the public and other stakeholders. Similar to other large global entities, CHT is committed to aligning its strategies and operations with the ten universally accepted principles contained within the "UN Global Compact", that is, CHT is against any form of corruption and bribery. In addition, any donation to political parties or social welfare organization is governed by clearly defined Code of Conduct. In accordance with The Company's "Principles for Ethical Management" Article 7, the Company shall not donate political contribution or offer, promise any facilitating payment. Therefore, we don’t have any occurrence on political contribution in 2017.

CHT has also put in place a channel for confidential lodgment of complaints or reporting of major financial, auditing and management issues. CHT requires its employees to strictly abide the Code of Ethics and shall never, in any circumstance, compromise in achieving a specific purpose. The goal is to ensure compliance of CHT business practices with legal requirements and social ethical standards to prevent any misconduct.  The Code of Ethics is now a part of CHT corporate training programs for new employees. In addition, almost all employees are required to take the Code of Ethics exams on annual basis.

Ethical Evaluation of Employee Behavior

The Chunghwa Telecom Code of Business Conduct and Code of Conduct are both published on our external and internal websites and all our employees are required to take the “Chunghwa Telecom Code of Business Conduct and Code of Conduct Test” each year. By doing so to maintain their professionalism and integrity, which optimize corporate governance and risk control, which establish honestly principled corporate culture. Additionally, the Chunghwa Telecom Employee Review Guidelines and Chunghwa Telecom Reward and Discipline Standard are published to evaluate employees, who are also confirmed to thoroughly understand and followed. Employees are rewarded or disciplined if their behavior is judged as to encourage or violate of the Guidelines.

In 2017, there were no breach against CHT's Codes of Ethics. We also continue to enhance relevant educational promotions. 

Please refer to our Corporate Code of EthicsCompliance Policy and Other Business Principles

Tax Governance and Strategy

Chunghwa Telecom commits to be a responsible taxpayer and take high-quality compliance as our tax principle, instead of taking any aggressive tax strategies to improve our tax efficiency.

Chunghwa Telecom generated consolidated revenues totaling NT$ 227.5 billion in 2017, decreased 1.1% from 2016 and represented a 98.4% accomplishment rate given the current year’s financial forecast. Due to increasing popularity of smart mobile devices, the Company experienced growing revenues from value-added services and data subscriptions that covered the decline of voice service. Net income attributable to parent company amounted to NT$ 38.9 billion while EPS reached NT$ 5.01 and a full-year accomplishment rate of 105.5%.

In 2017, Chunghwa Telecom’s tax expenses were equivalent to an effective tax rate of 16.57%; the difference from the 17% statutory tax rate was mainly attributed to the following: according to Article 4 of Income Tax Act, net dividends or net earnings recognized from local invested businesses are exempted from income tax; and Article 10 of Statute for Industrial Innovation, tax credits of research and development expenses.

Since more than 90% of our revenues are derived from operations in Taiwan, and the domestic tax rate in Taiwan is also considered to be relatively low, thus, the reported tax rate and cash tax rate of 2017 were lower than the industry’s average.

Business Performance in 2017   

                                                                                      Unit: NT$ million

 

Revenue

227,514

Operating Cost

146,837

Operating Expense

33,869

Earnings Before Tax

47,997

Reported Taxes

7,954

Reported Tax Rate

16.57%

Cash Taxes Paid

5,790

Cash Tax Rate

12.06%

 

Please refer to Chunghwa Telecom Tax Policy 

 

Since information disclosure assessment was launched by Securities & Futures Institute in 2004, Chunghwa Telecom (CHT) has been rated A++ and ranked among the top 10 in every year. CHT’s common shares are traded on the Taiwan Stock Exchange (2412) and CHT’s ADRs are traded on the New York Stock Exchange under the symbol CHT.  As such, CHT must abide both the domestic Taiwan and the foreign regulations governing information transparency and fair disclosure, which include the spokesperson system, material information disclosure as required in a timely manner, as well as accurate and comprehensive information publication on CHT’s corporate website. All information of interest to the investment community is made publicly available simultaneously in Taiwan and overseas to offer investors comprehensive and real-time financial and business information of the Company. 

Abiding by the Code of Conduct

The “Chunghwa Telecom Corporate Code of Ethics" defines the responsibilities CHT has in conducting business. The Code of Ethics clearly outlines the ethical standards and responsibilities required of directors, supervisors, executive officers and all employees while engaging in business practices. The Code of Ethics applies to individual employees and groups and the entire corporation when dealing with the public and other stakeholders. Similar to other large global entities, CHT is committed to aligning its strategies and operations with the ten universally accepted principles contained within the "UN Global Compact", that is, CHT is against any form of corruption and bribery. In addition, any donation to political parties or social welfare organization is governed by clearly defined Code of Conduct. In accordance with The Company's "Principles for Ethical Management" Article 7, the Company shall not donate political contribution or offer, promise any facilitating payment. Therefore, we don’t have any occurrence on political contribution in 2017.

CHT has also put in place a channel for confidential lodgment of complaints or reporting of major financial, auditing and management issues. CHT requires its employees to strictly abide the Code of Ethics and shall never, in any circumstance, compromise in achieving a specific purpose. The goal is to ensure compliance of CHT business practices with legal requirements and social ethical standards to prevent any misconduct.  The Code of Ethics is now a part of CHT corporate training programs for new employees. In addition, almost all employees are required to take the Code of Ethics exams on annual basis.

Ethical Evaluation of Employee Behavior

The Chunghwa Telecom Code of Business Conduct and Code of Conduct are both published on our external and internal websites and all our employees are required to take the “Chunghwa Telecom Code of Business Conduct and Code of Conduct Test” each year. By doing so to maintain their professionalism and integrity, which optimize corporate governance and risk control, which establish honestly principled corporate culture. Additionally, the Chunghwa Telecom Employee Review Guidelines and Chunghwa Telecom Reward and Discipline Standard are published to evaluate employees, who are also confirmed to thoroughly understand and followed. Employees are rewarded or disciplined if their behavior is judged as to encourage or violate of the Guidelines.

In 2017, there were no breach against CHT's Codes of Ethics. We also continue to enhance relevant educational promotions. 

Please refer to our Corporate Code of EthicsCompliance Policy and Other Business Principles

Tax Governance and Strategy

Chunghwa Telecom commits to be a responsible taxpayer and take high-quality compliance as our tax principle, instead of taking any aggressive tax strategies to improve our tax efficiency.

Chunghwa Telecom generated consolidated revenues totaling NT$ 227.5 billion in 2017, decreased 1.1% from 2016 and represented a 98.4% accomplishment rate given the current year’s financial forecast. Due to increasing popularity of smart mobile devices, the Company experienced growing revenues from value-added services and data subscriptions that covered the decline of voice service. Net income attributable to parent company amounted to NT$ 38.9 billion while EPS reached NT$ 5.01 and a full-year accomplishment rate of 105.5%.

In 2017, Chunghwa Telecom’s tax expenses were equivalent to an effective tax rate of 16.57%; the difference from the 17% statutory tax rate was mainly attributed to the following: according to Article 4 of Income Tax Act, net dividends or net earnings recognized from local invested businesses are exempted from income tax; and Article 10 of Statute for Industrial Innovation, tax credits of research and development expenses.

Since more than 90% of our revenues are derived from operations in Taiwan, and the domestic tax rate in Taiwan is also considered to be relatively low, thus, the reported tax rate and cash tax rate of 2017 were lower than the industry’s average.

Business Performance in 2017   

                                                                                      Unit: NT$ million

 

Revenue

227,514

Operating Cost

146,837

Operating Expense

33,869

Earnings Before Tax

47,997

Reported Taxes

7,954

Reported Tax Rate

16.57%

Cash Taxes Paid

5,790

Cash Tax Rate

12.06%

 

Please refer to Chunghwa Telecom Tax Policy