Obtaining R.O.C. source income not within the withholding tax scope during 2018, foreign profit-seeking enterprises should file income tax returns and make tax payments at their earliest convenience.

  National Taxation Bureau of Taipei(hereinafter referred to as the NTBT), Ministry of Finance expressed that the Income Tax declaration period for the taxable year 2018 will be ended on May 31, 2019. Foreign profit-seeking enterprises having neither permanent establishments nor business agents, selling cross-border electronic services and obtaining income not within the withholding tax scope during 2018 should file profit-seeking enterprise income tax returns of the taxable year 2018 and make tax payments at their earliest convenience. The NTBT explained that since 2017, foreign profit-seeking enterprises having neither permanent establishments nor business agents and selling cross-border electronic services to buyers within the territory of R.O.C. (hereinafter referred as The enterprises)and obtaining income not within the withholding tax scope under Article 88 of the Income Tax Act(for example income derived from B to C transactions), The enterprises or commissioned agents are mandatory to file Profit-Seeking Enterprise Income Tax returns and make tax payments during the declaration period of the taxable year according to Paragraph 1, Article 73 of the Income Tax Act and Article 60 of the Enforcement Rules of the Income Tax Act. The NTBT further explained that according to Paragraph 1, Article 79, Article 108 of the Income Tax Act, and Explanatory Decree No.10804524120 issued by the MOF on April 26, 2018, where a taxpayer fails to file an annual income tax return in accordance with the latter part of Paragraph 1, Article 73 of the Income Tax Act, the tax authority shall serve a delinquent notice, requesting the taxpayer to complete annual income tax return within 15 days from the date of receipt of the notice. The tax authority shall, after determining the amount of 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. Where a taxpayer further fails to file an annual income tax return within the time limit, and the amount of taxable income and the amount of tax payable have been determined by the tax authority based on data available or the profit standard of the same trade, 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. In case any additional taxation data discovered after the amount of taxable income and the amount of tax payable have been determined by the tax authority based on data available or the profit standard of the same trade, the tax authority shall impose a fine of no more than three times the amount of tax determined as payable in addition to the determined tax payable in accordance with Paragraph 2, Article 110 of the Income Tax Act. The NTBT reminded that to avoid a delinquent reporting surcharge, The enterprises who have not yet filed their income tax returns should file their profit-seeking enterprise income tax returns at their earliest convenience through the eTax Portal, Ministry of Finance (website: https://www.etax.nat.gov.tw) “Tax on Cross-Border Electronic Services/Profit-Seeking Enterprise Income Tax” section and make tax payments before the deadline of the declaration period. (Contact:Mr. Tsao, Section Head of the First Examination Division; Tel: 2311-3711 ext.1337; E-mail: na03469@ntbt.gov.tw)