Taiwan’s Ministry of Finance (MOF) announced that profit-seeking businesses with minor outstanding tax payments may still request to offset profits and losses.

This clarification was made by the Ministry on 6 May 2025.

The National Taxation Bureau of the Northern Area (NTBNA), MOF, stated that companies applying under Article 39 of the Income Tax Act must maintain complete account books and supporting documents, using Blue Returns or accounts audited and certified by a public accountant.

Additionally, it should file an annual income tax return within the prescribed period. In a recent announcement, the Ministry of Finance issued an interpretive ruling relaxing the requirement that profit-seeking enterprises must file annual income tax returns within the prescribed period to apply for offsetting between profits and losses. If a profit-seeking enterprise files its income tax return late, it must pay the amount of tax due independently. However, if the taxpayer does not meet the requirements under Paragraph 1, Article 20 of the Tax Collection Act, which mandates the imposition of a delinquency charge, the case may be considered minor depending on the circumstances. In such cases, the taxpayer may still be eligible to apply for the offsetting of profits and losses.

The Bureau explained with an example: Company A has maintained a complete set of account books and supporting documents for 2023, reporting an annual income of TWD10 million, audited and certified by a certified public accountant. After deducting TWD 5 million in losses from the previous 10 years, the taxable income is TWD 5 million, and the tax payable is TWD 1 million. Company A filed its settlement declaration on 31  May 2024, but the tax payable was not settled until 3 June 2024.

According to Paragraph 1, Article 20 of the Tax Collection Act, a delinquency charge equal to 1% of the amount of said tax shall be charged for every 3 days of delay. Although Company A settled the tax payable late, it does not meet the criteria for delinquency charges. According to the new interpretive ruling issued by the Ministry of Finance, the offset of TWD 5 million in profits and losses is still applicable.

The Bureau reminds profit-seeking enterprises that if they settle the tax payable more than three days after the prescribed deadline, they will not meet the ‘timely filing’ requirement and will not be eligible to apply for the offsetting of profits and losses.