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Title: The Taxpayer Rights Protection Act CH
Announced Date: 2016-12-28
Category: Ministry of Finance(財政部)
Article 1
The Taxpayer Rights Protection Act (hereinafter “this Act”) is enacted for the purposes of implementing the protection of the existence right, work right, property right, and other relevant basic rights in the Constitution of the Republic of China, insuring rights of taxpayers, achieving tax equity, and carrying through the due process of law.
In the event of the taxpayer’s rights protection, the special provisions of this Act shall be followed preferentially.
Article 2
The competent authorities as defined by this Act at the central government level shall be the Ministry of Finance, at the municipal level shall be the municipal governments, and at the county or city levels shall be the county or city governments.
Article 3
Taxpayers shall have the right and duty of paying taxes in accordance with law.
In the case of municipality, county (or city), and township (town or city), the law includes self-governance articles.
The administrative regulations and legal interpretations issued by the authorities merely can explain the original intention of law and regulate the essential technicalities and details of law. They cannot increase tax obligation or tax reduction which is unregulated by law.
Article 4
The expense that taxpayers pay for maintaining their basic living in accordance with human dignity for themselves and their dependents shall not be taxed.
The expense for maintaining the basic living mentioned in the preceding paragraph is based on the standard announced by the central Department of Budget, Accounting and Statistics and defined by the central competent authority as 60% of the median rate of the expenditure per person in the past year, and it shall be reviewed every two years.
When the central competent authority issues basic living expense, it shall also issue the decision criteria and judgment information as well.
Article 5
Taxpayers shall pay tax according to their actual affordability; no differential treatment is permitted unless for reasonable policy purposes.
Article 6
Tax acts or any other acts with specific policy-oriented tax incentives shall provide a definite implementation period as well as attain the reasonable policy goal as its limit and nothing more.
The enactment of tax incentives in the preceding paragraph shall be conducted by holding a public hearing and submitting a tax-form expenditure evaluation.
Article 7
In relation to laws involving taxation, such laws should be construed in accordance with the principle of taxation law and the respective purposes of the relevant laws, balancing therewith the economic purposes and the principle of equality in substantive taxation.
When the tax collection authorities define the constituent elements and facts of tax assessment, they shall base these on the existence of actual economic relationships and their related interests derived from such economic benefit.
Taxpayers, based on gaining tax benefits, may abuse legal forms to avoid the constituent elements of taxation by irregular transactions and attain the economic benefits equivalent to normal transactions. Such actions shall be termed tax avoidance. The tax collection authorities shall set up a claim for tax according to the legal forms equivalent to actual economic benefit and levy belated surcharges and interests.
The tax collection authorities shall bear the burden of proof in ascertaining the tax avoidance in the preceding paragraph and the constituent elements and facts of the tax assessment before that.
The obligation of taxpayers to assist in the reporting of the required information according to this Act and any other relevant tax acts is not exempted from the provision in the above paragraph.
The tax collection authorities, in identifying the obligations of taxpayers in transactions with related parties, investigate facts as in the case prescribed of this section, and in determining the correct calculation of the tax payable by the taxpayers may, in accordance with the tax laws, make adjustment of the calculation based on normal transactions or the obtained information.
Belated surcharges are calculated by the payable tax at 15%, and the taxpayer shall be charged the daily interest accrued on the amount of such supplementary tax at the interest rate based on the fixed interest rate on January 1 of each year for a one-year time deposit of postal savings, for the period from the date following the original deadline for making the payment of such tax to the date said notice was issued demanding supplementary payment of tax.
In the case of this section, the authorities may not impose a penalty on tax evasion, except that taxpayers conceal, make false and misleading presentation, or provide incorrect information to material items when declaring or being investigated, which results in the tax collection authorities making an inaccurate decision.
Taxpayers may, before engaging in specific transactions, provide relevant documents to the tax collection authority for consultation; the tax collection authority shall reply within six months.
Cases of tax avoidance before this Act comes into force shall be penalized according to every tax law but not yet be penalized, the regulation of Paragraphs 3, 7, and 8 shall apply. As for cases which have already been penalized but are still pending, the amount of such penalties shall not exceed the total amount of belated surcharges and interests prescribed in Paragraph 7, except for the proviso of Paragraph 8.
Article 8
The authorities shall actively make the following information available to the public for inquiry, downloading, and usage.
1.Income allocation brackets, the associated proportionate tax burden, and the number of held real estate properties of all citizens.
2.Tax-form expenditure evaluation.
3.Other information beneficial to promoting tax equity.
Article 9
Interpretative letters or directives and other administrative rules of tax items made by the authorities shall be available to the public, unless in relation to official secrets, business secrets, or personal privacy.
Interpretative letters or directives which are not available to the public according to Paragraph 2 of Article 160 of the Administrative Procedure Act, Paragraph 8 of The Freedom of Government Information Law, or other appropriate means shall not be applied to other cases.
The central competent authority shall review every four years whether or not the interpretative letters or directives violate the regulations, intentions, or increase any obligation to pay tax which is not set in law, and entrust external research units for their study.
Article 10
The authorities shall actively provide appropriate and essential assistance to taxpayers, and ensure them protection by due process of tax collection.
Article 11
Personnel appointed by the tax collection authorities concerned or the Taxation Administration of the Ministry of Finance shall conduct inquisition ex officio into evidence and shall take into consideration circumstances both advantageous and disadvantageous to the party. The means of investigation must be legal, necessary, and minimizing invasiveness into the basic rights of taxpayers.
The tax collection authorities shall have the burden of proof of constituent elements and facts of tax assessment or punishment, except where explicitly specified in other laws.
The evidence obtained from illegal investigation of personnel appointed by the tax collection authorities concerned or the Taxation Administration of the Ministry of Finance shall not be used as the basis of tax assessment or penalty, except that the evidence is a minor offence and the exclusion of utilization of that evidence apparently brings violation of public interest.
Before the tax collection authorities make a tax assessment or order a penalty, they shall give the taxpayer the chance to offer an opinion statement, except for the circumstances set in Article 103 of the Administrative Procedure Act or proviso of Article 42 of the Administrative Penalty Act.
The tax assessment or penalty made by the tax collection authorities shall be in writing and state therein its reason and legal basis, except for the circumstances set in Article 97 of the Administrative Procedure Act.
The penalties of the preceding paragraph shall not become effective unless in written notifications or public notices. If there is no written notice stating therein the reason, the amendment is only allowed before the administrative appeal procedure is concluded; if no administrative appeal procedure is required, such acts of remedy may be effected only before a suit is filed in the administrative court.
Article 12
In the case where the purpose of tax collection may not be attained without an investigation, the tax collection authorities concerned or the Taxation Administration of the Ministry of Finance shall notify in writing prior to the start of the investigation, the person under investigation, specifying the purpose and scale of such investigation. If the person under investigation has assigned an agent, the agent shall present power of attorney during the investigation and inquiry.
The person under investigation has the right to appoint an agent or appear in the company of an assistant, and may maintain silence or object to the investigation before the agent or assistant’s appearance, except that the agent or assistant appears past the time limit or is absent for no legitimate reason after legal notice.
The person under investigation may take pictures, video, and audio recording of the process of investigation by themselves or on request after informing the tax collection authorities, and the tax collection authorities shall not reject this, except for legitimate reasons for upholding the secrecy of tax investigation and writing it down in the record.
If it is necessary for tax collection authorities to take pictures, video, and audio recording, they shall inform the person under investigation in advance.
Article 13
After taxpayers file a recheck or administrative appeal, they may apply to tax collection authorities or the agency with jurisdiction of administrative appeal for examining, transcribing, copying, or taking photographs of relevant information about the tax assessment and penalty, provided that the materials or records are necessary for claiming or protecting his legal interest. The tax collection authorities or the agency with jurisdiction of administrative appeal shall not reject or provide incomplete information to the application in the preceding paragraph except for the circumstances set in Paragraph 2 of Article 46 of the Administrative Procedure Act or Article 51 of the Administrative Appeal Act and make clear their rationale.
Article 14
When tax collection authorities are unable to determine the tax basis after investigation, or the investigation cost is disproportionally expensive, tax estimation is allowed for the principle of upholding tax equity, and the estimation basis and calculation information shall be in writing.
Tax estimation made by tax collection authorities shall be deliberated and estimated for all relevant material items, and through reasonable and objective procedures and appropriate means.
Estimation shall be by the means which is nearest to the actual amount when more than two means exist.
In the cases that taxpayers have already carried out their obligation of assistance, tax collection authorities shall not demand penalty according to the estimation results.
Article 15
When personnel appointed by the tax collection authorities concerned or the Taxation Administration of the Ministry of Finance conduct taxation investigation, safeguards, and execution of tax payable or fine ex officio and in due procedure of law, they may not exceed what is necessary for accomplishing their goals and shall employ the approaches that can minimize infringement upon taxpayers’ rights.
Article 16
Taxpayers’ acts in breach of duty under tax law are not punishable unless committed intentionally or negligently.
No taxpayer may be excused from responsibility for administrative penalty by reason of his ignorance of the law, but the penalty may be reduced or exempted as the situation may justify.
In the case of tax collection authorities’ imposition of a fine, consideration shall be given to such factors as the culpability of the taxpayer’s act in breach of duty under tax law, the impact resulted therefrom, and the benefits gained from such an act. Additionally, the financial ability of the taxpayer penalized may also be taken into account.
Article 17
When the central competent authority organizes members of an administrative appeal review committee according to the Administrative Appeal Act, the ratio of men from outside the civil service, scholars, and experts may not be less than two-thirds. Additionally, they shall have a specialty in law, taxation, or accounting.
Article 18
Taxation special tribunals shall be set up in the Supreme Administrative Court and the High Administrative Court to try the administrative litigation filed by taxpayers due to taxation cases.
The taxation special tribunals shall be composed of judges who obtained the taxation specialty judge certification by the Judicial Yuan.
The judges dealing with taxation cases shall complete certain hours of professional training or on-the-job training every year.
The Judicial Yuan shall promulgate the composition of the taxation special tribunals, the standards of taxation specialty judge certification, training of the judges dealing with taxation cases every year, and related matters.
Article 19
To formulate advisory opinions of the basic policy of taxpayers’ rights protection, the central competent authority shall organize a taxpayer rights protection advisory committee.
The taxpayer rights protection advisory committee shall carry out the following:
1.The study and draft of basic policies and mechanisms concerning taxpayers’ rights protection.
2.The study, draft, revision, and review of the effect of plans concerning taxpayer rights protection.
3.The education, training, and promotion of taxpayer rights protection.
4.The coordination among every agency in relation to matters of taxpayers’ rights protection.
5.The review of implementation of tax preference and information which must be disclosed in accordance with this Act.
The head of the central competent authority of this Act shall be the chairman of the taxpayer rights protection advisory committee. The members of the taxpayer rights protection advisory committee are composed of representatives of relevant government agencies, private associations, organizations, scholars, and experts. The ratio of representatives of relevant government agencies shall not exceed one third of the number of the members. The number of members, tenure, appointment, organization, and related matters shall be promulgated by the central competent authority.
Article 20
The tax collection authorities shall actively provide appropriate and essential assistance to taxpayers, and appoint taxpayer rights protection ombudsmen by means of task forces in regard to their functions to deal with the following:
1. The assistance to taxpayers to communicate and coordinate tax disputes.
2. The acceptance of complaints or petitions of taxpayers, and propositions of recommendations for improvement.
3. When taxpayers seek remedy in accordance with laws, the taxpayer rights protection ombudsmen shall provide essential consultation and assistance.
4. The reporting of the results of work on taxpayer rights protection every year.
The taxpayer rights protection ombudsmen may conduct an investigation if necessary, when dealing with taxpayer rights protection matters.
The tax collection authorities shall report the names and means of contact of taxpayer rights protection ombudsmen to the Ministry of Finance for future reference, and announce these on a special website; the same will be done whenever an ombudsman is changed.
The Ministry of Finance may send personnel to examine the progress of execution set in Paragraph 1 and include this in its annual taxation affairs performance review.
Article 21
In the case when taxpayers are dissatisfied with the tax assessment disposition and file an administrative litigation after the recheck application, they may amend or add claim to the illegal tax assessment disposition before an administrative appeal decision is made by the administrative appeal review committee or the administrative litigation oral arguments on matters of fact being concluded, and the agency with jurisdiction of administrative appeal or administrative court shall take this into consideration; the same will be done when the agency with jurisdiction of administrative appeal or administrative court discovers that tax assessment disposition is illegal ex officio.
In the case of the preceding paragraph, the tax collection authorities shall file an allegation and state specifically and clearly the opinion of the amended or added claim.
Administrative courts shall produce evidence to verify taxpayers’ tax payable and assess the amount within the range of taxpayers’ challenges, except for complex cases which are difficult to settle.
The cases which are filed as an administrative litigation by taxpayers due to their dissatisfaction with the tax assessment dispositions, rechecks, or administrative appeal decisions, of which the tax assessment dispositions, rechecks, or administrative appeal decisions are revoked or amended by the court because of illegality after the implementation of this Act, and the tax payable has not been determined over 15 years after the date on which the revoked or amended judgment is made by the court, may not be assessed again.
The preceding paragraph may apply to belated surcharge, interests, delinquent reporting surcharges, and fines.
Article 22
Enforcement rules for this Act will be prescribed by the central competent authority.
Article 23
This Act shall come into force one year after its promulgation.