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Non-small-scale profit-seeking enterprises of sole proprietorship and partnership should file income tax returns for the profit-seeking enterprise within the prescribed period.

As prescribed in Article 71 of the Income Tax Act, taxpayers who are required to file an income tax return between May 1 and May 31 each year include individuals and profit-seeking enterprises. Only small-scale profit-seeking enterprises are exempt from this obligation; all others must file their tax returns before the deadline.

The National Taxation Bureau of Kaohsiung, Ministry of Finance, further explained that, although non-small-scale profit-seeking enterprises of sole proprietorship and partnership have been exempted from computing and making tax payments since 2018, they are still required to file tax returns for profit-seeking enterprises before the deadline prescribed by law. If not, the competent taxation authority will issue a delinquent notice in accordance with Article 79 of the Income Tax Act. Moreover, depending on whether the profit-seeking enterprise has completed an annual income tax return, a delinquent reporting surcharge will be levied at 10% (ranging from NT$1,500 to NT$30,000) or 20% (ranging from NT$4,500 to NT$90,000) of the amount of tax payable assessed and determined by tax authority for the current year in accordance with Article 108 of the Income Tax Act. 

The Bureau provides the following example: Party A who is the responsible person of Business A failed to file the tax return for profit-seeking enterprise income for 2022. Party A subsequently filed the tax return upon receiving a notification, and the National Taxation Bureau determined that Business A’s taxable income was NT$250,000. Although Business A is not required to compute and make tax payments, Paragraph 1 of Article 108 of the Income Tax Act stipulates that a 10% delinquent reporting surcharge, amounting to NT$5,000(calculated as NT$250,000 x tax rate of 20% x 10%)in this case, should be levied based on the applicable income tax rate for profit-seeking enterprises in 2022. Party A refused to accept the delinquent reporting surcharge and asserted that Business A was not required to compute and pay income tax for profit-seeking enterprises. Party A then applied for a review, but the request was rejected by the National Taxation Bureau in accordance with the aforementioned Income Tax Act.

The Bureau would like to remind citizens that those who operate non-small-scale profit-seeking enterprises, including sole proprietorships and partnerships, are obliged to file their income tax returns during the income tax filing period. Otherwise, they may face delays, delinquent reporting surcharges, and have their benefits and interests adversely affected. If you have any questions, please dial the free service hotline 0800-000-321 for more information or go to the Bureau’s website (https://www.ntbk.gov.tw) to make an inquiry online through the national tax smart customer service "National Tax Assistant."

Provided by: Legal Affairs Division
Contact person: Ms. Shih, Section Chief          Telephone: (07)7256600 Ext.7510
Written by: Ms. Chu                                           Telephone: (07)7256600 Ext.7511

 

Last updated:2024-11-04