Taiwan’s National Taxation Bureau of the Southern Area clarified that losses from overseas property transactions could be deducted only from income of the same type in the same taxable year. The bureau imposed additional basic income tax of TWD 400,000 and a penalty after a taxpayer used losses from 2023 to offset income in 2024.
Taiwan’s National Taxation Bureau of the Southern Area, under the Ministry of Finance has clarified that individuals cannot carry forward losses from overseas property transactions to subsequent taxable years when calculating their basic income tax.
Rules for deducting overseas property losses
Under Subparagraph 1, Paragraph 1, Article 12 of the Income Basic Tax Act and Point 16 of the Directions for the Filing and Investigation of Income Derived from Sources outside the ROC and from Sources in Hong Kong and Macau to be Included in the Amount of Individual Basic Income, losses from overseas property transactions may be deducted only from income derived from such transactions in the same taxable year. The deduction cannot exceed the income generated from those transactions.
If an individual has no income from overseas property transactions in a taxable year, or if the losses exceed that income, the unused losses cannot offset other categories of overseas income, such as profit-seeking or interest income. They also cannot be carried forward to subsequent taxable years.
The bureau explained that income and losses must be calculated using the actual transaction price and original cost for the relevant year. Any deduction claimed is also limited to the amount assessed and recognised by the tax collection authority.
Additional tax imposed for 2024
In the case concerned, a taxpayer attempted to use losses incurred from overseas property transactions in taxable year 2023 to offset income derived in 2024.
As the losses could not be carried forward, the bureau adjusted the taxpayer’s basic income and imposed additional basic income tax of TWD 400,000 for taxable year 2024, together with a penalty under the applicable laws and regulations.
Voluntary disclosure and penalty relief
The bureau reminded individuals disposing of overseas financial products or other overseas property to comply with the relevant requirements of the Income Basic Tax Act.
Taxpayers who have failed to calculate or declare their income correctly may voluntarily file a supplementary tax declaration and pay the additional tax and surcharging interest before an informant reports the case or the tax collection authority begins an investigation.
Under Article 48-1 of the Tax Collection Act, taxpayers who meet the applicable conditions may be exempted from relevant penalties.
This announcement was made on 8 October 2026.
