Mega Bank Annual Report 2017

72 Mega Bank -72- (35) Income tax A. Income tax expense (A) Components of income tax expenses: For the year ended December 31 2017 2016 NT$ US$ NT$ Current income tax: Income tax from current income $ 3,460,861 $ 116,732 $ 4,326,965 Tax on undistributed surplus earnings - - 403,060 Prior year income tax (over) under estimate ( 557,613 ) ( 18,808 ) 12,444 Total current tax 2,903,248 97,924 4,742,469 Deferred income tax: Origination and reversal of temporary differences ( 123,616 ) ( 4,170 ) ( 637,062 ) Income tax expense $ 2,779,632 $ 93,754 $ 4,105,407 (B) The income tax relating to components of other comprehensive income is as follows: For the year ended December 31 2017 2016 NT$ US$ NT$ Remeasuremnt on defined benefit plan $ 295,736 $ 9,975 $ 90,837 B. Reconciliation between accounting income and income tax expense: For the year ended December 31 2017 2016 NT$ US$ NT$ Income tax calculated based on pre-tax income using statutory tax rate enacted in the country where the branch operates $ 4,366,878 $ 147,291 $ 4,740,081 Effects of items not recognised under relevant regulations 6,307 213 6,652 Additional 10% tax payment levied on undistributed earnings - - 403,060 Effect of income basic tax 815,009 27,489 957,082 Income tax adjustments in respect of prior years ( 557,613 ) ( 18,808 ) 12,444 Adjusted effects on income tax exemption and other adjustments ( 1,850,949 ) ( 62,431 ) ( 2,013,912 ) Income tax expense $ 2,779,632 $ 93,754 $ 4,105,407 C. Deferred income tax assets or liabilities arising from the temporary differences are as follows: Temporary differences: 2017 NT$ January 1 Recognized in profit or loss Recognized in other comprehensive income December 31 Deferred income tax assets Allowance for doubtful accounts in excess of limit $ 2,580,441 $ 293,902 $ - $ 2,874,343 Reserve of guarantees in excess of limit 199,597 - - 199,597 Employee benefit liabilities reserve 1,249,033 ( 50,533 ) 295,736 1,494,236 Unrealized impairment loss 717,287 ( 4,448 ) - 712,839 Others 342,446 ( 60,110 ) - 282,336 $ 5,088,804 $ 178,811 $ 295,736 $ 5,563,351 Deferred income tax liabilities Land value increment tax ( $ 1,053,300 ) $ - $ - ( $ 1,053,300 ) Unrealized exchange gains ( 466,918 ) 29,048 - ( 437,870 ) Investment income accounted for under the equity method ( 600,384 ) ( 733 ) - ( 601,117 ) Others ( 41,050 ) ( 83,510 ) - ( 124,560 ) ( $ 2,161,652 ) ( $ 55,195 ) $ - ( $ 2,216,847 )