Taiwan’s tax authority has clarified that businesses that file on time but pay slightly late can still offset past losses against profits, provided no late payment surcharge applies.
Taiwan’s National Taxation Bureau of the Central Area, Ministry of Finance, has stated that businesses that filed their tax returns within the statutory deadline but paid the tax due late can still carry forward losses from the previous 10 years for offset against profits. This applies only if the delay did not reach the threshold for imposing a late payment surcharge under Paragraph 1, Article 20 of the Tax Collection Act. Such cases are considered minor violations.
The Bureau explained that, under the provision to Paragraph 1, Article 39 of the Income Tax Act, businesses must meet specific conditions to qualify for loss offsetting. They must be organised as a company and maintain complete accounting books and records. They must also use blue tax return forms, or have their returns audited and certified by a certified public accountant, for both the loss year and the year in which the deduction is claimed. In addition, they must file their tax returns on time.
To satisfy the timely filing requirement, businesses must file the relevant income tax returns and pay the tax due in accordance with the law within the statutory deadline for annual income tax returns or, where applicable, final-period or liquidation tax returns.
The Bureau further clarified that businesses using blue tax return forms, or having their returns audited and certified by a certified public accountant, may still qualify for loss offsetting if they pay the tax due within three days after the filing deadline. Although the payment is late, no late payment surcharge is imposed if it is made within this three-day period, as provided under Paragraph 1, Article 20 of the Tax Collection Act. Such cases are considered minor, and the businesses are still deemed to have met the timely filing requirement.
The Bureau reminded businesses to pay close attention to income tax filing deadlines and payment dates. The relaxation applies only where the outstanding tax is paid in full within three days after the filing deadline. Businesses that pay after this period will be subject to a late payment surcharge and will no longer qualify for loss offsetting.
The Bureau urged businesses to file their returns and pay the tax due within the statutory deadlines to protect their interests.
This announcement was made on 23 October 2026.
