Taiwan's tax authority warns businesses that missing CFC financial statement deadlines could forfeit valuable tax benefits, including loss carryforwards and deferred recognition options, urging timely extension applications before filing periods expire.
The Kaohsiung National Taxation Bureau of the Ministry of Finance announced on 25 May 2026 that, for any reason, those who are unable to submit their CFC financial statements within the prescribed period may apply to their local tax authority for an extension before the deadline for filing their corporate income tax return.
Alternatively, they may include the extension in the tax return, on page B7 of the return form, under the heading “Details of Income Recognized by Controlled Foreign Companies (CFCs) for Profit-Making Enterprises,” column A9, under “Whether to apply for an extension to submit the audited and certified financial statements or other documents that substitute for the financial statements,” by selecting “Apply for extension documents along with this filing,” and complete the filing on time.
If approved by the tax authority, the extension may be extended to six months from the day following the expiration of the filing period. For example, for the 2025 fiscal year settlement filing, the deadline for annual profit-making enterprises is 1 December 2026.
The agency specifically reminds businesses that they must submit CFC financial statements within the specified timeframe to be eligible for the following regulations:
- For the evaluation of profit or loss on “financial instruments measured at fair value through profit or loss (FVPL)” held by CFC, the option is to defer the profit or loss to the year of realisation and include it in CFC’s current year’s earnings.
- Losses of CFCs in each period, as verified by the tax authorities, may be deducted from the annual surplus of the CFC in the following 10 years from the year in which the loss occurred.
Businesses that require an extension to submit their CFC financial statements should do so before the deadline to protect their rights.
Since the implementation of the Controlled Foreign Company (CFC) system, profit-making enterprises have become quite familiar with the relevant regulations on CFC reporting and income calculation.
However, some profit-making enterprises have failed to submit the required documents within the time limit for settlement reporting due to the late verification process of the locations of their overseas related companies or the fact that their group financial statements have not yet been certified.
