The purposes of this Act are to uphold tax equity, to ensure tax revenue for the country, and to establish the basic requirements of profit-seeking enterprises and individuals in regard to their obligation to fulfill their income tax burden as a contribution to public finance.

This Act shall apply to all matters concerning the calculation, filing, payment and assessment of the Income Basic Tax. The provisions of the Income Tax Act and such Articles as are related to tax benefits that are included in other laws shall govern any such matters not provided for in this Act.

A profit-seeking enterprise or an individual shall pay income tax in accordance with this Act, with the exception of cases coming under the following conditions:
1. A profit-seeking enterprise organized in a form of sole proprietorship or partnership.
2. An organization or society which is established for educational, cultural, public welfare, or charitable purposes in accordance with Subparagraph 13, Paragraph 1, Article 4 of the Income Tax Act.
3. A consumer cooperative in accordance with Subparagraph 14, Paragraph 1, Article 4 of the Income Tax Act.
4. A public utility enterprise owned by governments at various levels in accordance with Subparagraph 19, Paragraph 1, Article 4 of the Income Tax Act.
5. An individual not residing in the territory of the Republic of China or a profit-seeking enterprise having no fixed place of business or business agent within the territory of the Republic of China in accordance with Paragraph 1, Article 73 of the Income Tax Act.
6. A profit-seeking enterprise filing its income tax return due to liquidation in accordance with Paragraph 2, Article 75 of the Income Tax Act; or a profit-seeking enterprise in the event of bankruptcy in accordance with Paragraph 6 of the same Article of the Income Tax Act.
7. A profit-seeking enterprise that does not apply for any investment tax credit in accordance with the laws and does not have any income within the scope of the provisions of any of the Subparagraphs of Paragraph 1 of Article 7 in its annual income tax return or current income tax return.
8. An individual who does not apply for any investment tax credits in accordance with laws and does not have any amount within the scope of the provisions of any of the Subparagraphs of Paragraph 1 of Article 12 and Paragraph 1 of Article 12-1 in his or her annual income tax return or current income tax return.
9. A profit-seeking enterprise whose basic income as calculated in accordance with Paragraph 1 of Article 7 is equal to or less than NT$ 500,000.
10. An individual whose basic income as calculated and aggregated in accordance with Paragraph 1 of Article 12 and Paragraph 1 of Article 12-1 is equal to or less than NT$ 6,000,000.
If the total increase of the consumer price index has reached a figure of 10% or higher compared to the index of the year of previous adjustment, the amount as described in Subparagraph 9 and Subparagraph 10 shall be adjusted accordingly. The adjusted amount shall be calculated in units of NT$ 100,000; an amount less than NT$ 100,000 shall be calculated in units of NT$ 10,000 and then rounded to the nearest NT$ 100,000 using the traditional method. The public announcement of the adjustment and consumer price index as indicated above shall be applied and interpreted mutatis mutandis to Paragraph 4, Article 5 of the Income Tax Act.

If the amount of regular income tax for a profit-seeking enterprise or an individual is greater than or equal to the amount of basic tax, the income tax of the current year for the said enterprise or individual shall be calculated in accordance with the Income Tax Act and other relevant laws. Whereas the amount of regular income tax is less than the amount of basic tax, the amount of income tax payable shall also include the balance of the amount of basic tax and regular income tax, in addition to the amount as calculated in accordance with the Income Tax Act and other relevant laws.
The balance calculated in accordance with the provisions in the preceding paragraph shall not allow for deductions claimed in regard to investment tax credit granted under the provisions of other laws.

In the case that a profit-seeking enterprise or an individual files a income tax return under the provisions of Paragraph 1, Article 71; Paragraph 1 and Paragraph 2, Article 71-1; Paragraph 2, Article 73; Article 74; or Paragraph 1, Article 75 of the Income Tax Act, he or she shall calculate, file and pay income tax in accordance with this Act.
In the case that an individual is exempted from filing his or her annual income tax return in accordance with Paragraph 3, Article 71 of the Income Tax Act, he or she shall still calculate, file and pay income tax in accordance with this Act under the condition that his or her basic income exceeds the amount calculated in accordance with Subparagraph 10, Paragraph 1 of Article 3.