Income Tax Expense (Tables)

12 Months Ended

Dec. 31, 2023

Major components of tax expense (income) [abstract]

Details of income tax expenses

(1) Details of income tax expenses are as follows (Unit: Korean Won in millions):

	For the years ended December 31
	2021		2022			2023
Current tax expense
Current tax expense with respect to the current period		884,843		1,332,636			689,395
Adjustments recognized in the current period in relation to the tax expense of prior periods		2,074		(13,982	)		(22,825	)
Income tax expense directly attributable to other equity		—		7,852			5,039
Sub-total		886,917		1,326,506			671,609
Deferred tax expense
Change in deferred tax assets (liabilities) due to temporary differences		15,672		(217,805	)		442,852
Income tax expense (income) directly attributable to equity		22,177		68,802			(224,668	)
Others		—		993			766
Sub-total		37,849		(148,010	)		218,950
Income tax expense		924,766		1,178,496			890,559

Income tax expense reconciled to net income before income tax expense

(2) Income tax expense reconciled to net income before income tax expense is as follows (Unit: Korean Won in millions):

	For the years ended December 31
	2021			2022			2023
Net income before income tax expense		3,687,045			4,547,570			3,517,453
Tax calculated at statutory tax rate (*1)(*2)		942,991			1,171,389			859,608
Adjustments:
Effect of income that is exempt from taxation		(41,335	)		(73,488	)		(37,500	)
Effect of expenses that are not deductible in determining taxable income		18,933			26,793			12,163
Adjustments recognized in the current period in relation to the current tax of prior periods		3,078			(14,088	)		(22,456	)
Others		1,099			67,890			78,744
Sub-total		(18,225	)		7,107			30,951
Income tax expense		924,766			1,178,496			890,559
Effective tax rate		25.10	%		25.90	%		25.32	%

(*1) The applicable income tax rate of prior fiscal years: 11% up to 200 million Won in tax basis, 22% over 200 million Won to 20 billion Won, 24.2% over 20 billion Won to 300 billion Won and 27.5% over 300 billion Won.

(*2) The applicable income tax rate: 9.9% up to 200 million Won in tax basis, 20.9% over 200 million Won to 20 billion Won, 23.1% over 20 billion Won to 300 billion Won and 26.4% over 300 billion Won.

Changes in cumulative temporary differences

(3) Changes in deferred tax assets and liabilities for the years ended December 31, 2021, 2022 and 2023, are as follows (Unit: Korean Won in millions):

	For the year ended December 31, 2021
	Beginning balance			Recognized as income (expense)			Recognized as other comprehensive income (expense)			Ending Balance
Gain (loss) on financial assets		276,495			(57,187	)		54,048			273,356
Gain on valuation using the equity method of accounting		33,597			(17,282	)		(1,055	)		15,260
Gain (loss) on valuation of derivatives		(142,352	)		(6,755	)		(698	)		(149,805	)
Accrued income		(66,228	)		(16,254	)		—			(82,482	)
Provision for loan losses		(46,495	)		11,870			—			(34,625	)
Loan and receivables written off		8,221			23			—			8,244
Loan origination costs and fees		(170,196	)		(24,267	)		—			(194,463	)
Defined benefit liability		442,007			32,890			(25,282	)		449,615
Deposits with employee retirement insurance trust		(424,906	)		(7,291	)		196			(432,001	)
Provision for guarantee		9,485			(2,061	)		—			7,424
Other provision		85,173			15,398			—			100,571
Others (*)		(118,964	)		24,193			(5,032	)		(99,803	)
Net deferred tax assets		(114,163	)		(46,723	)		22,177			(138,709	)

(*) Among the deferred tax assets and liabilities classified as ‘Others,’ the deferred tax asset arising from unused tax losses amounts to 8,838 million Won.

	For the year ended December 31, 2022
	Beginning balance			Business combination			Recognized as income (expense)			Recognized as other comprehensive income (expense)			Ending Balance
Gain (loss) on financial assets		273,356			—			(55,410	)		155,199			373,145
Gain on valuation using the equity method of accounting		15,260			—			11,139			(5,844	)		20,555
Gain (loss) on valuation of derivatives		(149,805	)		—			159,664			758			10,617
Accrued income		(82,482	)		—			(7,848	)		—			(90,330	)
Provision for loan losses		(34,625	)		—			14,520			—			(20,105	)
Loan and receivables written off		8,244			—			(318	)		—			7,926
Loan origination costs and fees		(194,463	)		—			25,370			—			(169,093	)
Defined benefit liability		449,615			—			15,760			(95,590	)		369,785
Deposits with employee retirement insurance trust		(432,001	)		—			(18,437	)		216			(450,222	)
Provision for guarantee		7,424			—			904			—			8,328
Other provision		100,571			—			(13,342	)		—			87,229
Others (*)		(99,803	)		(1,473	)		16,878			14,063			(70,335	)
Net deferred tax assets		(138,709	)		(1,473	)		148,880			68,802			77,500

(*) Among the deferred tax assets and liabilities classified as ‘Others,’ the deferred tax asset arising from unused tax losses amounts to 3,536 million Won.

	For the year ended December 31, 2023
	Beginning balance			Business combination			Recognized as income (expense)			Recognized as other comprehensive income (expense)			Ending Balance
Gain (loss) on financial assets		373,145			—			(272,072	)		(258,467	)		(157,394	)
Gain on valuation using the equity method of accounting		20,555			—			(35,357	)		4,430			(10,372	)
Gain (loss) on valuation of derivatives		10,617			—			24,869			326			35,812
Accrued income		(90,330	)		—			(42,608	)		—			(132,938	)
Provision for loan losses		(20,105	)		—			61,093			—			40,988
Loan and receivables written off		7,926			—			1,846			—			9,772
Loan origination costs and fees		(169,093	)		—			(4,324	)		—			(173,417	)
Defined benefit liability		369,785			—			29,308			28,172			427,265
Deposits with employee retirement insurance trust		(450,222	)		—			(50,044	)		548			(499,718	)
Provision for guarantee		8,328			—			(54	)		—			8,274
Other provision		87,229			—			91,888			—			179,117
Others (*)		(70,335	)		(11,593	)		(22,729	)		323			(104,334	)
Net deferred tax assets		77,500			(11,593	)		(218,184	)		(224,668	)		(376,945	)

(*) Among the deferred tax assets and liabilities classified as ‘Others,’ the deferred tax asset arising from unused tax losses amounts to 1,998 million Won.

Unrealizable temporary differences

(4) Unrealizable temporary differences are as follows (Unit: Korean Won in millions):

	December 31, 2022			December 31, 2023
Deductible temporary differences		330,376			313,565
Tax loss carry forward		49,405			16,823
Taxable temporary differences		(8,898,834	)		(9,138,085	)
Total		(8,519,053	)		(8,807,697	)

Expected extinctive date of tax loss carry forward that are not recognized as deferred tax assets

As of December 31, 2023, the expected extinctive date of tax loss carry forward that are not recognized as deferred tax assets are as follows (Unit: Korean Won in millions):

	1 year or less		1–2 years		2–3 years		More than 3 years
Tax loss carry forward		16,823		—		—		—

Accumulated deferred tax charged directly to other equity

(5) Details of accumulated deferred tax charged directly to other equity are as follows (Unit: Korean Won in millions):

	December 31, 2022			December 31, 2023
Gain(loss) on valuation of financial assets at FVTOCI		213,876			(44,591	)
Gain(loss) on valuation of equity method investments		(3,766	)		664
Gain on foreign currency translation of foreign operations		9,938			10,261
Gain on valuation of hedge accounting of the net investment in foreign operations		9,815			14,854
Remeasurements of the defined benefit plan		(20,584	)		8,136
Gain(loss) on derivatives designated as cash flow hedge		(86	)		240
Total		209,193			(10,436	)

Current tax assets and liabilities

(6) Current tax assets and liabilities are as follows (Unit: Korean Won in millions):

	December 31, 2022		December 31, 2023
Current tax assets		53,274		203,542
Current tax liabilities		843,555		103,655