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Laws & Regulations Database of The Republic of China (Taiwan)

Print Time:2024/04/16 16:10
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Chapter Law Content

Chapter 2 Consolidated Income Tax
Article 11
(Deleted)
Article 12
The surplus profit derived by an individual from incidental trading activities as stated in Category 1, Paragraph 1, Article 14 of the Act refers to earnings received by an individual and not by a profit-seeking enterprise from the sale of goods, the calculation of which is governed by provisions of the Act concerning calculation of income from profit-seeking activities.
Article 13
Where a professional practitioner fails to conduct final settlement and filing according to the Act, fails to prepare account records and keep receipts according to the law, or fails to provide account books and receipts to support its declared income, the tax authority may determine its income according to the general charge and fee standards of practitioners of the same profession.
The charge and fee standards stated in the preceding Paragraph are established by the national tax administration under the Ministry of Finance in all districts after consulting with the trade association of each profession, and submitted to the Ministry of Finance for approval.
Article 14
The payment standards for travel expenses, daily living expenses and overtime pay as prescribed by Subparagraph 4, Category 3, Paragraph 1, Article 14 of the Act shall be established by the national tax administration under the Ministry of Finance in all districts, and submitted to the Ministry of Finance for approval.
Article 15
The necessary losses and expenses stated in Subparagraph 1, Category 5, Paragraph 1, Article 14 of the Act refer to the depreciation of fixed assets, depletion of depreciated assets, amortization of intangible assets, repair charges, insurance premiums and reasonable and necessary fees paid to have property leased to receive profits. Pertinent provisions of Section 4, Chapter III of the Act are applicable in deductions for depreciation, depletion and amortization. For deductions for necessary losses and expenses for which the taxpayer can provide substantive proof, the deduction of the declared amount shall be allowed; where the taxpayer fails to provide substantive proof or provides fraudulent proof, the tax authority may make adjustment in accordance with the deduction standards approved by the Ministry of Finance.
The standards stated in the preceding Paragraph shall be established by the national tax administration under the Ministry of Finance in all districts, and submitted to the Ministry of Finance for approval.
Article 16
Money received in the form of rental deposits as stated in Subparagraph 3, Category 5, Paragraph 1, Article 14 of the Act refers to two types of lease terms which are “rent and deposit” and “no rent and deposit only”. The deposit refers to any deposit, etc. provided for lease of property.
Other persons stated in Subparagraph 4, Category 5, Paragraph 1, Article 14 of the Act refer to any individual or juristic person other than the taxpayer, his/her spouse and his/her lineal relatives.
The local prevailing rent stated in Subparagraph 4 and Subparagraph 5, Category 5, Paragraph 1, Article 14 of the Act is established by the national tax administration under the Ministry of Finance in all districts, and submitted to the Ministry of Finance for reference.
Article 17
Where the taxpayer keeps detailed accounting records and actual receipts for the deduction of costs and necessary expenses prescribed by Category 6, Paragraph 1, Article 14 of the Act, the deduction in accordance with the declared amount shall be allowed; where the taxpayer keeps incomplete accounting records and receipts, the tax authority may make adjustments in accordance with the standards approved by the Ministry of Finance.
The standards stated in the preceding Paragraph are to be drafted and established by the national tax administration under the Ministry of Finance in all districts, and submitted to the Ministry of Finance for approval.
Article 17-1
Holding over one year as stated in Category 7, Paragraph 1, Article 14 of the Act refers to cases where there has been a period of over one year from the day of acquisition to the day of transfer.
Article 17-2
Where an individual selling his or her house can present documents certifying the selling price and costs and expenses in the transaction, the calculation of property transaction income shall be verified based on the documents in accordance with Category 7, Paragraph 1, Article 14 of the Act; where the individual fails to declare the above or provide certification documents, the tax authority may determine the income in accordance with the approval standards set by the Ministry of Finance.
The standards stated in the preceding Paragraph are to be established by the national tax administration under the Ministry of Finance in all districts by referring to the actual economic condition and trading activities in the house market in that current year, and submitted to the Ministry of Finance for approval.
Article 17-3
The term “structured product” as stated in the Act refers to a combination of fixed-income products and derivatives products sold by transaction-related parties such as securities firms or banks to a client according to the regulations.
Where an individual is engaged in transactions in the structured products as described in the preceding paragraph and the date of the maturity of the transaction is on or after 1 January 2010, the revenue generated during the duration of the contract after deduction of the costs and necessary expenses shall be the actual amount of income on the same day.
The term “the date of the maturity of the transaction” as stated in the preceding paragraph refers to early termination or settlement at the maturity of the contract. The term “the revenue generated during the duration of the contract” refers to any interim payments or proceeds received upon early termination or settlement at the maturity of the contract. The term “the costs and necessary expenses generated during the duration of the contract” refers to the initial invested principal and fee charges.
Article 18
(Deleted)
Article 19
Those who undertake intermittent lumbering or alternate lumbering in forestry are not subject to the provisions of Paragraph 3, Article 14 of the Acts governing variable income.
Article 19-1
(Deleted)
Article 19-2
(Deleted)
Article 19-3
(Deleted)
Article 19-4
(Deleted)
Article 19-5
(Deleted)
Article 20
Operation of two or more profit-seeking enterprises as stated in Paragraph 1, Article 16 of the Act refers to proprietorship or partnership, of which the setoff is limited to the profit and loss in the same year/period, and the provisions of Article 16 of the Act is not applicable to its investment in corporations, cooperatives, limited partnerships, and medical care corporations.
Article 21
Regarding Subparagraph 1, Paragraph 1, Article 17 of the Act that governs application of the amount of tax exemption for dependents, where children of the taxpayer or siblings of the taxpayer or his/her spouse that attained the age of majority and are enrolled in school or supported by the taxpayer due to physical or mental disability, the taxpayer shall submit the school enrollment certificate or a copy of the handbook for the disabled and mentally retarded specified or other such recognized proof issued by the relevant government organization, or a copy of a medical diagnosis issued by a specialist physician as required in Paragraph 1, Article 19 of the Mental Health Act.
Article 21-1
Item 1 to 3, Subparagraph 1, Paragraph 1, Article 17 of the Act that governs application of the amount of tax exemption for dependents does not require cohabitation of the taxpayer and his/her dependants.
Article 21-2
(Deleted)
Article 21-3
(Deleted)
Article 22
(Deleted)
Article 23
(Deleted)
Article 24
(Deleted)
Article 24-1
Item 2-3, Subparagraph 2, Paragraph 1, Article 17 of the Act provides that deduction of medical and childbirth expenses requires submission of papers issued by the hospital. In the case of fraudulent declaration and ascertained tax evasion by unlawful means, the tax authority shall not only pursue the tax payment according to the law, but also report those involved in such criminal activity to the competent judicial authorities for investigation.
Article 24-2
(Deleted)
Article 24-3
Deduction of interest on housing mortgages prescribed in Subparagraph 2-(2)-(v), Paragraph 1, Article 17 of the Act shall meet the following requirements:
1. The house is owned and registered under the name of the taxpayer himself/herself, his/her spouse or their dependents.
2. The taxpayer himself/herself, his/her spouse or dependents completes registration of household on the address, and does not use the house for lease, business operation or professional practice during the taxable year.
3. The taxpayer obtains and submits receipts of interest for the same year paid to financial institutions for the housing loan.
Article 24-4
According to Subparagraph 2-(3)-(iv), Paragraph 1, Article 17 of the Act, a taxpayer who applies for special deduction for the disabled or handicapped shall submit a copy of the handbook for the disabled and mentally retarded specified or other such recognized proof issued by the relevant government organization, or a copy of a medical diagnosis issued by a specialist physician as required in Paragraph 1, Article 19 of the Mental Health Act.
Article 24-5
According to Subparagraph 2-(3)-(v), Paragraph 1, Article 17 of the Act, anyone applying for a special deduction for educational tuition shall submit a photocopy of the receipts for tuition paid or other relevant certificates.
Article 24-6
According to Item 2-6, Subparagraph 2, Paragraph 1, Article 17 of the Act, a taxpayer that declares a deduction for housing rent expenditure shall submit the following certification documents:
1. Certification documents for lease of house and payment of rent: A photocopy of the lease agreement or other certification documents and payment certificates sufficient to prove the above.
2. Certification documents for lease of house for residential self-use: A certificate proving that the taxpayer himself/herself, the spouse or lineal dependents complete registration of household on the address during the taxable year, or the taxpayer’ affidavit clearly stating that the leased house is for the residential use of the taxpayer and not for business operation or professional practice within the taxable year.
Article 24-7
The gross consolidated income stated in the preamble of Paragraph 1 and Subparagraph 2-(2)-(?), Paragraph 1, Article 17 of the Act shall exclude the total amount of the dividends and earnings which the taxpayer opts to calculate the tax payable separately in accordance with the provisions of Paragraph 5 of Article 15 of this Act.
Article 25
Taxpayers who fail to itemize their deductions in their tax returns and fail to fill in the application for standard deduction are deemed to have elected to apply for the standard deduction.
Where the taxpayer elects and fills in the application for standard deduction, or is deemed to have elected to apply for the standard deduction in accordance with the preceding Paragraph, the taxpayer shall not request a change to itemized deductions once the tax authority has approv
Article 25-1
The provisions of Article 17-1 of the Act shall not apply to the spouse of the individual who files a joint tax return, or the individual who is the dependent of a taxpayer in his or her tax return in accordance with Article 71-1 of the Act. A full amount of exemption and standard deduction is allowed.
Article 25-2
Where the taxpayer applies for tax credits or tax refunds of the consolidated income tax paid in accordance with Article 17-2 of the Act due to repurchase of another building for self-use, the taxpayer shall submit the following certification documents to the tax authority having jurisdiction where the registered household is in the year the application for such deduction or tax return is filed:
1. The copy of the contracts of the sale of one building and the purchase of the other for self-use and the copy of the certification of receiving and of paying the price of the buildings; or the copy of the contracts used to conduct registration of the transfer of the sold and of the purchased buildings for self-use with the land administration.
2. The copy of the certificates of ownership of the sold and of the purchased buildings for self-use; or the transcripts of building transfer.
3. The household certificates of the years in which the buildings were sold and purchased.
Where the buildings for sale and repurchase are not in the same special municipality or county/city, the handling tax authority shall write and have the tax authority at the place where the building for sale and repurchase are located verify the relevant information before this matter can be handled; after deduction or tax return is approved, the taxpayer shall immediately inform the tax authority at the place where the building for sale or repurchase is located of the relevant information.
The consolidated income tax amount for deduction or return stated in Paragraph 1 refers to the consolidated income tax amount increased due to addition of the property transaction income when the consolidated income for the same year is ascertained.
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