On 15 August 2023, Taiwan’s National Taxation Bureau of the Central Area (The Taichung Branch), Ministry of Finance indicated that according to the Income Tax Act, where a profit-seeking enterprise fails to file an annual income tax return within the prescribed period, the tax authority shall serve a delinquency notice, requesting the profit-seeking enterprise to complete it within 15 days from the date of receipt of the notice. In the event of failure to file the annual income tax return after expiration of the prescribed period, the tax authority shall make provisional assessment of the amount of income and tax payable on the basis of available taxation data or the profit standard of the same trade. Furthermore, the tax authority shall levy a delinquency reporting surcharge.
For instance, company A failed to file its 2022 tax return within the prescribed period, but subsequently filed it within 15 days from the date of receipt of the notice from the tax authority. The tax authority shall, after determining the amount of its income and the amount of tax payable through investigation, levy a delinquent reporting surcharge in an amount equal to 10% of the tax determined as payable. The amount of delinquent reporting surcharge shall not exceed NT$30,000 but shall not be less than NT$1,500. If company A failed to file its 2022 tax return within the time limit, the amount of taxable income and the amount of tax payable shall be determined by the tax authority based on the available data or the profit standard of the same trade. Besides, the tax authority shall levy a delinquent reporting surcharge in an amount equal to 20% of the tax determined as payable. The amount of delinquent reporting surcharge shall not exceed NT$90,000 but shall not be less than NT$4,500.
The Taichung Bureau specifically reminds the public that profit-seeking enterprises failing to file their 2022 tax return and 2021 undistributed earnings, should file them as early as possible whether they have received the notice from the tax authority or not.
