Tax Governance

Approach to tax

E.SUN FHC commits to not using tax havens or low-tax jurisdictions for tax avoidance, and refuses to transfer profits through special structures arrangement which is not in accord with arm's length principle. We have established tax governance and transfer pricing policies as guiding principles for E.SUN FHC and its subsidiaries. We comply with the letter and spirit of the tax laws, realize tax transparency and afford reasonable tax to fulfill sustainable development.

•The nine principles of tax governance and transfer pricing policy are as follows:

Principles of E.SUN FHC Tax Governance and Transfer Pricing Policy
Tax Compliance	Complying with the letter and the spirit of tax laws and regulations to file tax returns and prepare related documents.
Comprehensive Decision	Evaluating the impacts comprehensively and making tax strategies in accordance with local and international tax trends.
Transparency	Disclosing tax information in financial reports and annual reports regularly and publicly to ensure information transparency.
Proactive communication	Developing open and transparent dialogues with tax authorities to assist in improving tax systems.
Tax incentives	Instead of seeking abusive tax results violating the spirit of tax laws to decrease tax burden, we use legal and transparent tax incentives.
Business structure	Business structure and transactions shall reflect economic reality. No special arrangements shall be used to avoid paying tax.
Risk management	Evaluating potential tax risks and adopting appropriate strategies when we make tax decision.
Commercial substance	Related-party transactions shall reflect economic reality and the decision-making party shall bear risk and take reasonable profits.
Arm's length principle	The trade terms of related-party transactions should be similar to non-related-party's.

Tax Governance and Risk Control Mechanism

The Board, as the highest governance body for tax matters at E.SUN FHC, reviews the status of domestic and international tax compliance as well as the latest tax developments every 6 months. The ongoing oversight enables the Board to manage tax risks and stay informed about global tax trends. Below are the cases under the mechanism.

Item	Case Description
Compliance and planning	In response to the implementation of the Global Minimum Tax (GMT) in 2024, E.SUN FHC engaged an accounting firm to assess the impact of GMT on the group's tax burden, financial reporting disclosures and then made appropriate strategy.
Risk management	The Board of E.SUN FHC manages the frequency and amount of tax disputes to maintain them at a low risk level by using risks identification and a three lines of defense mechanism to oversee tax matters. Additionally, hotlines and mailboxes have been established internally and externally to report illegal or unethical tax-related matters.
Succession planning	E.SUN FHC and its subsidiaries employ qualified and trained tax professionals with the appropriate levels of expertise. We share tax experience through regular internal meetings and participate in seminar to enhance our skills in tax. Tax knowledge is well passed down through working papers and workflow chart.
Performance appraisal	E.SUN FHC and its subsidiaries prohibit tax personnel from using aggressive tax avoidance measures to achieve high ratings. Annual tax work goals are established and evaluated based on specific principles and we develop annual tax work schedule accordingly.

Stakeholder engagement and management of concerns related to tax

To reinforce public trust, we proactively contact stakeholders to discuss tax issues and engage in public policy advocacy on tax to support the improvement of tax environment.

Tax authorities	E.SUN FHC and its subsidiaries maintain open and honest communication with tax authorities. In 2024, when the Ministry of Finance of Taiwan proposed a draft tax amendment for increasing the income basic tax, we proactively provided industry insights on the public policy online participation network platform to build a fair tax environment with the government.
Public tax advocacy -NGO	E.SUN FHC actively participates in peer review organized by the international tax advocacy organization, The B Team. We exchanged tax experience with Fortune 500 multinational mining companies during the evaluation process. E.SUN got outstanding results across 7 different evaluation aspects in 2024, showing the effectiveness of our commitment to responsible tax practices.
Peers and Banker Association	To ensure that the tax principles for recognizing financial holding company expenses keep pace with the times, E.SUN FHC participated in a tax project led by the Bankers Association with domestic peers in 2024. We did legislative discussions with the Financial Supervisory Commission and the National Taxation Bureau proactively.
Independent Directors and Investors	E.SUN FHC publicly discloses tax information and the reasons for changes in the effective tax rate on our official website each year. Additionally, our independent directors specialized in accounting and tax review financial statements each quarter to understand tax costs and risks.