Taiwan’s Fengyuan Branch has clarified how profit-seeking enterprises should offset losses when selling multiple properties subject to the Income Tax on House and Land Transactions, including rules for different tax rates and land value increment tax.
Taiwan’s Fengyuan Branch of the National Taxation Bureau of the Central Area, Ministry of Finance, has clarified how profit-seeking enterprises should calculate and offset gains and losses when selling multiple properties subject to the Income Tax on House and Land Transactions in the same year.
The Branch said enterprises falling under the category of separate calculation with consolidated filing must first offset transaction losses against house and land transaction income subject to the same tax rate in the current year. Any remaining losses may then be offset against income from properties subject to different tax rates.
Tax treatment of house and land transactions
According to Articles 4-4 and 24-5 of the Income Tax Act, when a profit-seeking enterprise sells houses or land acquired after January 1, 2016, the transaction income or loss is determined after deducting relevant costs, expenses, or losses from the total income.
The resulting balance is taxable income and is taxed separately at the applicable rate of 45%, 35%, or 20%, depending on the holding period of the property. The amount is then consolidated for payment.
Where an enterprise sells multiple pieces of real estate subject to this calculation method in the same year, losses must first be offset against transaction income from properties taxed at the same rate.
If losses remain after that offset, they may be applied against transaction income from properties subject to different tax rates in the same year.
Treatment of land value increment tax
The Branch also explained the treatment of land value increment tax under the Land Tax Act.
Land value increment tax paid, except for the portion corresponding to the total amount of land appreciation that was not deducted from real estate transaction income, may not be recognised as a cost or expense.
After deducting the total amount of land appreciation calculated on the basis of the publicly announced land value in accordance with Article 30, Paragraph 1 of the Land Tax Act, the remaining balance of the transaction income is not included in the business income of the enterprise.
Newly constructed buildings
A separate rule applies when a profit-seeking enterprise sells a building it constructed for the first time after completion together with the underlying land.
In such cases, the real estate transaction income calculated under the relevant rules, after deducting the total amount of land appreciation based on the publicly announced land value, is included in the taxable business income.
Where the resulting balance is negative, it is treated as zero. However, if the transaction income itself is negative, the loss may be deducted from the enterprise’s business income. The total amount of land appreciation may not be deducted.
Reminder to enterprises
The Fengyuan Branch urged profit-seeking enterprises selling multiple real estate properties subject to the Income Tax on House and Land Transactions to follow the relevant laws and regulations when calculating transaction income.
This announcement was made on 28 August 2026.
