Taiwan’s Central District National Taxation Bureau has reminded profit-seeking enterprises to declare income tax using industry codes that accurately reflect their actual economic activities, citing an audit case in which a company’s misclassification resulted in its profits being reassessed under standard net profit ratios in accordance with the Income Tax Act.
Taiwan’s Central District National Taxation Bureau of the Ministry of Finance has reminded profit-seeking enterprises to declare profit-seeking enterprise income tax using the correct industry code based on their actual economic activities for the year.
The announcement is made today, 30 January 2026.
The Bureau explained that the industry classification should reflect an enterprise’s primary economic activity and be determined by reference to the industry names and definitions set out in the Standard Classification of Tax Industry Codes of the Republic of China published by the Statistics Department of the Ministry of Finance.
The Bureau cited a recent audit case involving Company A, which declared its industry code as “Other Unclassified Food Wholesale” when filing its annual income tax return. A review found that the company’s main transactions were linked to health food and related industries, suggesting a mismatch between its declared industry classification and its actual business activities.
Further investigation showed that Company A sold health food and other food products through multiple online platforms. The company later explained that it had shifted its business model to online sales in response to market trends. Based on these findings, the Bureau determined that the appropriate industry code should have been “Online Shopping Operations (Food and Beverage Products).”
Because the company dealt in a wide range of products, it was unable to provide a complete inventory record of purchases and sales, nor could it submit comprehensive accounting books and vouchers. As a result, the accuracy of its operating costs could not be verified. In accordance with Article 83 of the Income Tax Act, the Bureau assessed the company’s operating profit using the standard net profit ratio for the relevant industry as promulgated by the Ministry of Finance. This assessment increased the company’s taxable income by more than TWD 13 million.
The Bureau reminded enterprises that they must declare the correct industry code based on their actual economic activities when filing income tax returns and should promptly review and adjust the declared code if their business model or sales methods change.
Taxpayers who are uncertain about the applicable industry code may consult the query system under Standard Classification of Tax Industry Codes on the Ministry of Finance website (https://www.mof.gov.tw → Fiscal and Trade Statistics → Standard Classification of Tax Industry Codes → Query System) and file their income tax return using the appropriate code.
