Taiwan’s Datun Office has clarified that profit-seeking enterprises may report foreign exchange gains or losses only when they are realised during annual income tax filings.
Taiwan’s Datun Office, National Taxation Bureau of the Central Area, Ministry of Finance, stated, on 23 January 2026, that in response to frequent fluctuations in international exchange rates, profit-seeking enterprises must report foreign currency exchange gains or losses only when realised during the annual income tax filing.
The office explained that for foreign purchases or sales made by profit-seeking enterprises, any gains or losses arising from differences between the booking exchange rate and the settlement exchange rate shall be treated in accordance with Article 29 and Article 98, respectively, of the Regulations Governing Assessment of Profit-seeking Enterprise Income Tax.
Foreign exchange gains or losses are limited to those actually realised. Unrealised book differences resulting solely from exchange rate fluctuations may not be included in the profit or loss of the current year, and adjustments shall be made accordingly. The computation method may adopt either the first-in, first-out (FIFO) method or the moving average method.
The office especially reminds companies that, when reporting foreign exchange gains or losses, they must clearly distinguish between realised and unrealised portions, and properly retain relevant calculation data for verification to avoid disallowance and additional tax assessment.
This announcement was made on 23 January 2026.
