Taiwan’s National Taxation Bureau of the Northern Area said individuals who provided their own houses to companies for business use free of charge still had to report imputed rental income for individual consolidated income tax.
Taiwan’s National Taxation Bureau of the Northern Area, Ministry of Finance, announced on 30 September 2026 that individuals who provided houses they owned to companies for business use without charging rent were still required to calculate and report rental income for individual consolidated income tax.
Under Paragraph 4, Category 5, Paragraph 1, Article 14 of the Income Tax Act, when a taxpayer lends property to another person for use, rental income must be calculated based on prevailing local rental rates unless it is verified that the property was provided free of charge and was not used for business operations or the practice of a profession.
The bureau explained that Paragraph 2, Article 16 of the Enforcement Rules of the same Act defines “other persons” as individuals or juridical persons other than the taxpayer, the taxpayer’s spouse and lineal relatives. As a company is a “juridical person”, it is therefore regarded as an “other person” under the rules.
Accordingly, where a property is used for business purposes, rental income must be imputed and reported for individual consolidated income tax, regardless of whether the company was established by a relative or whether the property was provided free of charge.
The bureau gave the example of taxpayer Mr A, who in 2025 provided a house registered in his name free of charge to Company B, for which he was the responsible person, to register its business address and conduct business activities. Although Mr A did not collect rent, the company was a “juridical person” and the property was “used for business purposes”.
Based on prevailing local rental rates, the bureau calculated rental income for the year at TWD 120,000. After applying the 43% deduction, Mr A’s taxable rental income was TWD 64,000 [TWD 120,000 × (1 – 43%)], which was included in his individual consolidated income tax assessment.
As Company B had not actually paid rent, it could not report the imputed TWD 120,000 as rental expense when filing its profit-seeking enterprise income tax return for the year, under Subparagraph 7, Article 72 of the Regulations Governing the Assessment of Profit-Seeking Enterprise Income Tax.
The bureau reminded taxpayers who provide their property free of charge to companies or other persons for business operations or the practice of a profession to proactively report rental income based on prevailing local rental rates when filing their individual consolidated income tax returns. This would help avoid additional tax assessments arising from underreporting.
