The Rules are established in accordance with Article 121 of the Income Tax Act (hereinafter called “the Act”).

For "the amount of tax which, computed at the applicable domestic tax rate, is increased in consequence of inclusion of income derived from abroad" stated in Paragraph 2, Article 3 of the Act, the calculation equation is as follows:
The amount of tax which, computed at the applicable domestic tax rate, is derived from domestic income and income from abroad - the amount of tax which, computed at the applicable domestic tax rate, is derived from domestic income＝ amount of tax which is increased in consequence of inclusion in calculation of income derived from abroad

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Where the trustee in a trust deed is an individual, the tax office shall help the trustee apply for issuance of the tax withholder's uniform number.

When the trustee calculates various income amounts of the beneficiary in accordance with Paragraph 1, Article 3-4 of the Act, the trustee accounting system may adopt either a cash or accrual basis, which shall not be changed once determined. The term for income calculation shall commence on the first day of January and end on the thirty-first day of December of each calendar year.
When the trustee calculates various income amounts of the trust property in accordance with Article 3-4 of the Act, the related costs, necessary expenses and losses shall be deducted from entries under corresponding income categories in accordance with the proportion of amounts under various income categories to the gross income derived from the trust property, except for what can be directly, reasonably and clearly categorized that may be individually categorized, recognized and deducted.

The time of actual distribution stated in Paragraph 5 and Paragraph 6, Article 3-4 of the Act refers to the time of actual payment, transfer payment or remittance payment.

A “public utility enterprise” stated in the Act refers to a not-for-profit enterprise organization, the portion of which included in total budgets of governments at various levels shall be the net amount of its annual surplus/deficit and the amount of increase/decrease in its funds. However, where there is a regulation requiring its net amount of surplus/deficit to be compiled into total budgets of government at various levels when there is certain substantial amount accumulated, the regulation shall govern.

Subsidiaries of organizations or societies stated in Subparagraph 13, Paragraph 1, Article 4 of the Act refer to organizations separately set up to run companies or operate business pertaining to educational, cultural, public welfare and charitable organizations or institutions, in order to fulfill their goals of establishment.

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“The portion of the transaction income attributable to changes from date of acquisition to December 31, 1973” as stated in Subparagraph 16, Paragraph 1, Article 4 of the Act refers to the portion of the final closing price for negotiable securities of the same type in excess of the acquisition cost in the calendar year of 1973.
For negotiable securities without the closing price stated in the preceding Paragraph because of failure to go public, the value of company's stocks are calculated by the company's net assets assessed by the tax office in the same year according to the number of shares actually issued by the company; for bonds, the calculation is based on the total amount of unpaid balance and unpaid bond interest payable before December 31, 1973.

Exemption of profit-seeking enterprise income tax for foreign international transportation enterprises in accordance with Subparagraph 20, Paragraph 1, Article 4 of the Act is limited to the cases where there is a reciprocal tax exemption clause in the tax treaty signed with the R.O.C. government or there is consent to reciprocal tax exemption by exchange of diplomatic letters, and where the Ministry of Finance has approved the practice of such tax exemption.

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According to Subparagraph 16, Paragraph 1, Article 4 of the Act, where the transaction income generated in the sale of property of an individual or a profit-seeking enterprise is exempted from tax; no transaction loss shall be deducted.

Individual income derived from written articles, musical compositions, musical productions, dramas, cartoons, etc. as stated in Subparagraph 23, Paragraph 1, Article 4 of the Act refers to income derived from publication of the original or translated manuscripts, music scores, music, scripts, comics, etc., income from the sale of rights to others for their publication, or income from freelancing them to newspapers and magazines.
Individual income derived from copyright books stated in Subparagraph 23, Paragraph 1, Article 4 of the Act refers to the income earned based on a certain percentage of sales quantity or amount out of the proceeds resulting from the sale of a person’s work when he or she has had his or her work published by a publisher.
Individual income derived from written articles, copyright books, musical compositions, musical productions, dramas, cartoons, or as remuneration for speeches and lectures on an hourly basis as prescribed by Subparagraph 23, Paragraph 1, Article 4 of the Act is classified as income from professional practice.

Subparagraph 8, Article 8 of the Act is applicable only to the remuneration for service of personnel stationed in a foreign country and the remuneration is exempt from income tax in that foreign country.

Those who are eligible for tax exemption as stated in Subparagraph 21, Paragraph 1, Article 4 of the Act shall apply for approval with the governing authority of the subject enterprise, and then submit relevant certification documents to apply for approval with the governing tax office.

The favorable interest rate stated in Subparagraph 22, Paragraph 1, Article 4 of the Act is determined by the Ministry of Finance.

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For a trust fund prescribed in Paragraph 6, Article 3-4 of the Act, the account book required to be prepared by the trustee in accordance with Article 6-2 of the Act shall contain the types of income incurred for the trust property, and shall establish the beneficiary's withheld tax account, which are used to record the amount of tax withheld that can be distributed to the beneficiary.
The commencing and expiry dates for the trustee to keep records of accounts stated in the preceding Paragraph shall be the first day of January and the thirty-first day of December respectively in each calendar year.
The account prescribed in Paragraph 1 has a balance amount of zero when the trust is established; the beginning balance amount for each of the subsequent years shall be equal to the ending balance amount for the preceding year.

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The term of exchange stated in Article 9 of the Act includes cases where the government carries out nationalization with just compensation pursuant to the law, and where compensation is received for accidental damages to property.

Where a contact person sent by a foreign profit-seeking enterprise to gather business intelligence and negotiate price quotation does not represent the enterprise in signing of contracts or delivery of goods ordered, the person is not a "business agent" as stated in Paragraph 2, Article 10 of the Act.

Disasters of force majeure stated in Subparagraph 2-(2)-(iv), Paragraph 1 of Article 17 and Article 35 of the Act refer to earthquakes, storms, floods, droughts, frost, fire, debris flow, tsunamis, epidemics, plagues of insects, wars, nuclear emergency, gas explosions, or other unforeseeable and unavoidable disasters or events that cannot be resisted by human force.
To receive deduction for losses in disasters of force majeure described in the preceding paragraph, the taxpayer shall prepare a checklist of losses and certification papers within 30 days after the disaster happens to report to the tax authority in charge which may then send its staff to conduct investigation.
Where the taxpayer fails to report to the tax authority in charge within the period prescribed in the preceding paragraph to request that the aforesaid office conduct an investigation but is able to prove that his or her losses sustained in the disaster are true by providing sufficient documents, the tax authority in charge shall verify the losses by checking such documents.

The term “other juristic person” stated in Subparagraph 1, Category 1, Paragraph 1 of Article 14, Paragraph 2 of Article 14-3, Paragraph 4 of Article 15, Article 42, Paragraph 2 of Article 76, Subparagraph 1, Paragraph 1 of Article 88, Subparagraph 1, Paragraph 1 of Article 89, Subparagraph 1 of Article 106, and Article 114-4 of the Act refers to limited partnerships registered in accordance with the Limited Partnership Act and medical care corporations which have been approved by the central competent authority and registered in accordance with the Medical Care Act.

From January 1, 2018, where a shareholder of a company, a member of a cooperative, or an investor of other juristic person receives the dividends or earnings distributed from its investment in a domestic company, a cooperative, or other juristic person, such income shall be levied according to the following regulations:
1.An individual residing in the Republic of China who receives dividends or earnings distributed from a company, a cooperative, or other juristic person and such dividends or earnings are earned in the year 1998 or any ensuing year thereafter, shall be subject to assessment of income tax in accordance with the provisions of Paragraph 4 or Paragraph 5 of Article 15 of the Act. Dividends or earnings are earned by a company, a cooperative, or other juristic person in the year 1997 or any previous year, shall be computed in the gross consolidated income and said individual shall be subject to assessment of income tax in accordance with the provisions of Paragraph 2 of Article 15 of the Act.
2.The dividends or earnings received by a profit-seeking enterprise organized as a company, a cooperative, or other juristic person having its head office within the territory of the Republic of China shall not be included in its taxable income in accordance with Article 42 of the Act.
3.The dividends or earnings received by an organization or institution established for educational, cultural, public welfare, or charitable purposes shall be included in its taxable income to be levied or exempted from income tax in accordance with the provisions of Paragraph 13 of Article 4 of the Act.
4.The dividends or earnings received by an individual not residing in the territory of the Republic of China or a profit-seeking enterprise having its head office outside the territory of the Republic of China shall be withheld and the withholding tax paid in accordance with the provisions of Article 88 of the Act by the tax withholder.