Chapter 4 Tax Levy Procedure
Article 49
A taxpayer shall conduct filing of the consolidated income tax with the tax authority in the district where the registered household is located when the tax return is filed; a profit-seeking enterprise shall conduct filing of the profit-seeking enterprise income tax with the tax authority in the district where the registered enterprise is located when the tax return is filed.
A profit-seeking enterprise with its head office located within the territory of the Republic of China and other fixed places of business within the territory of the Republic of China shall jointly conduct filing with the tax office in the registration district where the head office of the profit-seeking enterprise files the tax return. An enterprise with its head office located outside the territory of the Republic of China and other fixed places of business located within the territory of the Republic of China shall conduct filing with the tax office in the registration district where its fixed places of business files tax returns separately.
For a foreign profit-seeking enterprise without any fixed place of business within the territory of the Republic of China but with a business agent, the business agent shall conduct filing with the tax office in the registration district where it files the tax return.
Article 50
The date of filing shall be based on the date the tax return is delivered to the tax office; the tax return sent by mail shall be done by registered mail, and the date stamped and shown on the mail shall be the filing date; for a tax return sent through the Internet, the date the filed information is transmitted to the tax office shall be the date of filing.
Article 55-1
When an incorporated profit-seeking enterprise conducts alternative computation of its profit-seeking enterprise income for the first-half year in accordance with Paragraph 3, Article 67 of the Act, one half of the expenses or losses based on the whole year that may be subtracted according to the Act shall be subtracted.
Computation of the provisional tax paid under Paragraph 3, Article 67 of the Act shall be handled in accordance with Article 40 of the Act.
Article 56
An approved small-scale profit-seeking enterprise as stated in Subparagraph 3, Article 69 of the Act refers to a profit-seeking enterprise that is small in scale, and of which the amount of sales per month is unable to reach the standard for the use of uniform invoices to investigate and levy business tax.
Those who are exempted from the profit-seeking enterprise income tax according to the Act or other related laws and regulations as stated in Subparagraph 4, Article 69 of the Act refer to education, culture, public welfare, charity institutions or organizations and their associated operating organizations, consumer cooperatives operated in accordance with law doing no business with outsiders, and state-owned public utility enterprises that are exempted from the income tax in accordance with Subparagraph 13, Subparagraph 14, and Subparagraph 19, Paragraph 1 of Article 4 of the Act, as well as all profit-seeking enterprises of which the income is exempted from profit-seeking enterprise income tax in accordance with Article 9, Article 9-2, Article 10, Article 15, and Article 70-1 of the abolished Statute for Upgrading Industries; Article 18 of the Act for Establishment and Administration of Science Parks; Article 28 of the Statute for Encouraging Private Organizations to Participate in Transportation Construction; Article 36 of the Act for Promotion of Private Participation in Infrastructure Projects; Article 42 and Article 44 of the Business Mergers and Acquisitions Act; Article 13, Paragraph 1 of Article 22-7 and Paragraph 1 of Article 22-16 of the Offshore Banking Act; Article 35 of the International Airport Park Development Act; Article 29 of the Act for the Establishment and Management of Free Trade Zones; Article 23-1 of the Statute for Industrial Innovation; and other laws and regulations.
Article 57-1
Where an individual dies or vacates his or her residence within the territory of the Republic of China and leaves the territory, except when the spouse of the individual files a joint tax return according to law, or the individual is the dependent of a taxpayer in his or her tax return, he or she is allowed not to file income tax returns under Paragraph 3, Article 71 of the Act if his or her income to be filed does not exceed the total of the amount of tax exemption and the standard deduction of the year converted in accordance with Article 17-1 of the Act; however, if an application has been filed for refund of the tax withheld and the tax credit as specified in the provisions of Paragraph 4, Article 15 of the Act, or subject to separated taxation as stipulated in the provisions of Paragraph 4, Article 15 of the Act, the said taxpayer shall still be required to file the annual income tax return.
Article 57-2
For consolidated income tax returns prescribed by Paragraph 1 and Paragraph 2, Article 71-1 of the Act, Article 77 of the Act governing final settlement and return of the consolidated income tax shall be applicable.
Where a final settlement and tax return form required by Article 71-1 Paragraph 3 of the Act is for the use of an operational subsidiary opening its business to the public, Article 77 of the Act governing final settlement and return of the profit-seeking enterprise income tax shall apply; where the form is for the use of a non-profit organization and its operational subsidiary without opening its business to the public, it shall be separately prescribed by the Ministry of Finance.
Article 58
According to Paragraph 3, Article 71 of the Act, whether the gross consolidated income exceeds the total of the amount of tax exemption and the amount of standard deduction for the same year shall be reviewed and calculated by the tax authority based on the information acquired during investigation. Where the amount of reviewed and calculated gross consolidated income exceeds the total amount stated in the preceding paragraph and the taxpayer fails to file income tax returns according to law, the tax authority shall proceed in accordance with Article 79 of the Act.
Article 60
A taxpayer that appoints an agent to file his tax return in accordance with Paragraph 2, Article 72 of the Act shall have the agent present a letter of undertaking to be submitted to the governing tax authority for approval, and then the agent may perform the duty to file the tax return on behalf of the principal in accordance with the Act
Where an individual not residing within the territory of the Republic of China or a profit-seeking enterprise without any fixed place of business within the territory of the Republic of China and business agent accrues income not within the scope of withholding under Article 88 of the Act and is unable to conduct the filing by himself, he shall apply to the tax authority for approval and appoint an individual residing within the territory of the Republic of China or a profit-seeking enterprise with a fixed place of business to file the tax return as an agent.
“Having income which does not fall within the withholding scope as provided in Article 88 of the Act” as stated in Paragraph 1, Article 73 of the Act refers to income derived from sources within the territory of the Republic of China prescribed in Article 8 of the Act, income for which the amount of tax payable shall be separately withheld but unable to be included in the scope of withholding under Article 88 of the Act in accordance with Paragraph 2, Article 2 of the Act, or income included in the scope of withholding but unable to reach the withholding cut-off amount or the withholding agent is not specified by Article 89 of the Act. The phrase “make tax payment according to the prescribed tax rates” refers to a situation where an individual not residing within the territory of the Republic of China accrues income not within the scope of withholding, the applicable withholding rate shall be the withholding rate of income for the similar category in the same year at the time when he or she exits the territory before the income tax declaration deadline for the year begins. The phrase “shall file a tax return and make tax payment in accordance with the regulations concerned” refers to a situation where a taxpayer does not leave within the time limit prescribed for filing income tax return in the taxable year as prescribed by Article 71 and Article 72 of the Act, his or her income shall be subject to the withholding rates prescribed as above.
Article 60-1
Where an offshore banking unit has its head office located within the territory of the Republic of China, in addition to filing the tax return in accordance with Article 73-1 of the Act, its head office shall file the annual income tax return for the other income of the unit jointly in accordance with Paragraph 2, Article 3 and pay profit-seeking enterprise income tax in accordance with the Act, the Offshore Banking Act, and the Income Basic Tax Act.
For sharing expense with institutions operating at the same location, the offshore banking unit, the offshore securities branch, or the offshore insurance branch shall submit the proposed apportion method to the tax office in charge for reference within three months after the date the offshore banking unit, the offshore securities branch, or the offshore insurance branch begins operation.
Article 61
Where the agent appointed in accordance with Paragraph 2, Article 72 and Paragraph 2, Article 73 of the Act and Paragraph 2, Article 60 of the Rules fails to file a tax return on behalf of the taxpayer within the prescribed period of time, the tax authority shall determine the taxpayer’s amount of income and amount of tax payable and shall notify the agent to pay in accordance with Article 79 of the Act.
Article 64
Calculation of liquidation income is as follows:
Inventory liquidation revenue - Inventory liquidation cost ＝ Inventory liquidation profit/loss
Non-inventory asset liquidation profit ＋ Profit from liability payoff ＋ Assessed residual asset profit after liquidation ＋ Other profits ＝ Liquidation profit
Non-inventory asset liquidation loss ＋ Creditor's right collection loss ＋ Assessed asset Loss after liquidation ＋ Liquidation expenses ＋ Other Losses ＝ Liquidation loss
Inventory liquidation profit/loss ＋ Liquidation profit - Liquidation loss ＝ Liquidation income or loss
Liquidation income - Approved amount of loss incurred in past years that is deductible according to law - Various profits not counted as income according to law - Various income exempted from tax according to law ＝ Taxable income for liquidation
Article 31 regarding calculation of related costs of goods sold is applicable to calculation of the inventory liquidation cost as stated in the preceding paragraph.
Article 65
Liquidation income shall be calculated for tax levy for the then current year according to the profit-seeking enterprise income tax rate in the same year. However, Article 40 of the Act shall not be applied.
Article 65-1
Where a profit-seeking enterprise organized as a sole proprietorship or a partnership files the annual income tax return in accordance with Paragraph 2, Article 71 of the Act or makes its current final report on total business income or income earned from liquidation in accordance with Paragraph 4, Article 75 of the Act, the sole proprietor or partners shall calculate the withholding tax of the income of the aforesaid enterprise based on the respective percentage of his or her investment or partnership contract and deduct the aforesaid withholding tax from his or her consolidated income tax payable on his or her annual income tax return for the year.
Article 68
Where the taxpayer fails to submit various appendix tables or certification documents according to the rules when filing the tax return, the tax authority shall notify him or her to resubmit corrected documents within 7 days.
Article 70
When a company capitalizes its undistributed surplus earnings by issuing additional equity shares, the amount of dividend shares distributed by the said company to each of its individual shareholders residing within the territory of the Republic of China, exclusive of the dividend shares which are distributed in accordance with the provisions set out in Article 16 and Article 17 of the abolished Statute for Upgrading Industries before its amendment and promulgation on December 31, 1999, shall be included by each of such shareholders having received such dividend shares into the aggregate amount of his/her incomes to be declared in his/her annual consolidated income tax return to be filed in the taxable year in which such capitalization project of undistributed surplus earnings is effected, and the income tax levied on such income shall be paid by the shareholders receiving dividend from such shares under the law accordingly. However, for such shareholders as may receive dividend shares and who have no residence within the territory of the Republic of China, and for the profit-seeking enterprise whose head office is located outside the territory of the Republic of China, the assessment and withholding of the income tax levied on the dividend shares distributed to and received by the foregoing shareholders shall be effected by the issuing company in accordance with the provisions set out in Article 88 of the Act when making distribution of such dividend shares.
Article 71
A taxpayer that conducts a make-up final settlement and filing in accordance with Paragraph 1, Article 79 of the Act shall still submit relevant statements, forms and receipts in accordance with Paragraph 1, Article 76 of the Act; as for the belated filing surcharge or the non-filing surcharge additionally levied in accordance with Article 108 of the Act, the tax office shall notify the taxpayer by completing and issuing an approval notice recording the facts and their basis.
A profit-seeking enterprise that conducts a make-up final settlement and filing of undistributed earnings in accordance with Paragraph 2, Article 102-3 of the Act shall still submit relevant statements, forms and receipts in accordance with Paragraph 4, Article 102-2 of the Act; as for the belated filing surcharge or the non-filing surcharge additionally levied in accordance with Article 108-1 of the Act, the tax office shall notify the profit-seeking enterprise by completing and issuing a notice recording the facts and evidencing documents in accordance with Paragraph 1, Article 116 of the Act.
Article 72
The term "data/information found during investigation" as used in Paragraph 4, Article 3-4; Paragraph 5 and Paragraph 6, Article 75; Article 79; Paragraph 1 and Paragraph 3, Article 83; Paragraph 2, Article 102; Paragraph 2, Article 102-3; and Paragraph 2, Article 108 of the Act shall mean the data/information pertaining to the income/revenue, loss, costs and expenses of the tax-payer involved.
Article 73
The Profit Standards of the Same Trade set by Article 79 and Article 83 of the Act are established by the national tax offices under the Ministry of Finance in all districts, and are reported to the Ministry of Finance for reference.
Article 75
When the tax office asks the opinions of trade associations in accordance with Paragraph 4, Article 80 of the Act, it shall prepare written materials attached with the “Income Standard Examination Form” to request answers to be given within a definite time.
Article 76
Mistakes in recording or calculation on notices as stated in Paragraph 2, Article 81 of the Act solely refer to mistakes in written records or computation errors of numbers for various verified items on notices. A person who has a dissenting view on verified facts or application of laws may apply for reexamination in accordance with Article 35 of the Tax Collection Act.
Article 81
Where a taxpayer fails to present the portion of account books, documents and receipts stated in Article 83 of the Act that relates to the income amount or the income amount for a certain period in the tax year, the tax office may determine the income amount regarding that portion in accordance with the information found or Profit Standard of the Same Trade.
Where the taxpayer fails to present the portion of account books, documents and receipts stated in Article 83 of the Act that relates to the undistributed earnings, the tax office may determine undistributed earnings regarding that portion in accordance with the information found.
Article 82
The time of payment stated in Paragraph 1, Article 88 of the Act refers to the time when actual payment, transfer payment, or remittance payment is made.
The dividends payable by a company that are not paid within 6 months after the date the shareholders' meeting resolves to distribute the earnings are deemed paid; the same rule applies to the cash dividends payable approved by the board of directors' meeting and are not paid within 6 months after the date the board of directors' meeting.
Article 83
Where any of the taxable incomes itemized in Article 88 of the Act is exemptible from income tax under any Subparagraph of Paragraph One, Article 4 of the Act, no income tax withholding shall be made in respect of such income. However, if any of such incomes is subject to fixed-amount tax exemption, the portion of the amount in such income exceeding the taxation threshold shall still be subject to tax withholding.
The interest income derived by a banking institution from money-lending business and the commission income derived by a profit-seeking enterprise from issuing uniform invoices, leasing business and/or the royalty income under the law shall all be exempted from income tax withholding.
Article 83-1
Where the trustee in a trust act invests the trust property in a profit-seeking enterprise, the said profit-seeking enterprise shall name the said trustee as the taxpayer, and shall thus issue to the beneficiary a dividend voucher (warrant) in accordance with the provisions set out in Paragraph 1, Article 102-1 of the Act.
The trustee referred to in the preceding paragraph shall, based on the dividend amount or the earning amount distributed to it and in accordance with the provisions set out in Paragraph 1, Article 3-4 of the Act, calculate the amount of income receivable by the beneficiary, and shall further, within the time limit specified in Article 92-1 of the Act, fill out and issue to the beneficiary a dividend voucher (warrant), whereas, if there are two or more beneficiaries involved, the said trustee shall, in accordance with the distribution ratios as specified in Paragraph 2, Article 3-4 of the Act, calculate respectively the amount of income receivable for each individual beneficiary.
Where the beneficiary referred to in the preceding paragraph is an individual person not residing in the territory of the Republic of China or a profit-seeking enterprise whose head office is located outside the territory of the Republic of China, then the said trustee shall, in accordance with the provisions set out in Paragraph 3, Article 89-1 of the Act, withhold the income tax from the amount of income payable to the beneficiary by the said trustee; and shall further issue to the said beneficiary a withholding tax voucher (certificate) in accordance with the provisions set out in Article 92-1 of the Act, and will be exempted from issuing the dividend voucher (warrant).
Article 83-2
For a trust fund prescribed in Paragraph 6 of Article 3-4 of the Act, its trustee shall separately put the tax withheld by the withholding agent in accordance with Paragraph 1 of Article 89-1 of the Act into the beneficiary’s tax withholding account according to the income categories.
When a trustee for the trust fund stated in the preceding Paragraph actually distributes the trust benefits, he shall apply the ratio of the balance amount in the beneficiary’s withheld tax account to the accumulated undistributed balance amount for each category of income, according to the income amount for each category distributed to each beneficiary this time, to separately calculate the withheld tax for each category of income enjoyed by the beneficiary. The calculation equation is as follows:
Beneficiary’s various income taxes withheld ＝ (Balance amount in the beneficiary’s withheld tax account for each individual category of income) ÷ (Accumulated undistributed balance amount for each category of income) × (Income amount distributed to the beneficiary for each category of income this time).
The trustee shall subtract the withheld tax held for the beneficiary this time calculated in accordance with the preceding Paragraph from the balance amount in the beneficiary’s withheld tax account for each individual category of income.
When a trustee for the trust fund stated in Paragraph 2 actually distributes the trust benefits which are the dividends or earnings distributed by a domestic company, a cooperative, or other juristic person after January 1, 2018, he or she shall be subject to Article 10-3 (of these Enforcement Rules).
Article 85-1
When a withholding agent completes and files the withholding statement in accordance with Paragraph 1, Article 92 of the Act, he shall accurately list the name or title of the income receiver, his address, identification number, year of income, total payment amount, amount of tax withheld, etc. in detail in accordance with the prescribed format.
When a trustee completes and files the withholding statement or the withholding exemption statement and related statements in accordance with Article 92-1 of the Act, he shall accurately list the name or title of the income receiver, its address, identification number, year of income, total payment amount, amount of tax withheld, etc. in detail in accordance with the prescribed format.
The total payment amount stated in the preceding Paragraph refers to the income calculated or distributed by the trustee to the beneficiary in accordance with Article 3-4 of the Act.
When a profit-seeking enterprise fills in the dividends statement in accordance with Paragraph 1, Article 102-1 of the Act, it shall accurately list the name or title of the income receiver, its address, identification number, year of payment, year of income, amount of dividends or amount of earnings, etc. in detail in accordance with the prescribed format.
Article 85-2
The tax withholder of the interest from government bonds, corporate bonds, and financial bonds shall withhold the tax in accordance with the following rules:
1. Where the coupon rate was appointed at a fixed or floating rate, the tax withholder shall withhold the tax at the time when interest is paid in accordance with the prescribed withholding rate.
2. In the case where the bonds are zero coupon bonds, the tax withholder shall withhold the tax at the time of maturity in accordance with the prescribed withholding rate and the difference between the par value and the issuance price of the bonds.
3. In the case where the bonds include option rights such as conversion, swap, repurchase and redemption rights, the tax withholder shall withhold tax at the time when interest premium is paid in accordance with the prescribed withholding rate; in the case where the bonds are appointed at a coupon rate, the tax withholder shall be subject to the provision otherwise provided for in Subparagraph 1 above.
Article 87
Where a taxpayer leases out property to receive deposit or any fund similar to deposit, or where the taxpayer receives the price of a lien created on property, it shall, in accordance with Subparagraph 3, Category 5, Paragraph 1, Article 14 of the Act, calculate its lease income using the one-year deposit interest rate generally adopted by local banks, to be self-declared when filing annual income tax returns.
Article 88
A taxpayer that lends his or her property to others without any consideration shall enter into a no-consideration lending agreement with the other party, with such agreement being attested by two third-party persons and notarized under the relevant articles of the Act on Authentication.
Article 89-1
Where the various incomes subject to withholding prescribed in Paragraph 1, Article 88 of the Act are incomes earned in kind, in the form of valuable securities or in foreign currencies, Paragraph 2, Article 14 of the Act shall apply upon computation.
Article 95
When a holder of bearer shares or corporate bonds is claiming dividends or interest distributed by a company, the holder shall present the citizen's identification card for the profit-seeking enterprise or the withholding agent to record his/her name, address and identification number; if the holder is a profit-seeking enterprise, it shall present its company title, person-in-charge, name, address and business administrative number to be recorded by the profit-seeking enterprise or the withholding agent and proceed in accordance with Article 92 and Article 102-1 of the Act.
Article 96
Where a withholding agent refunds what was excessively withheld from the taxpayer in accordance with Article 94 of the Act, the withholding agent may apply with the governing tax authority for refund or may offset it against a commensurate portion of the tax to be withheld and paid at the same year. The withholding agent shall go to the governing tax authority to proceed on the refund procedure if the year has come to an end.
Article 97
In the course of filing an annual income tax return, a taxpayer whose tax is paid to and withheld by different jurisdictions shall have the tax authority where he/she files annual income tax return to verify and refund the tax if a refund is granted.