Profit-seeking enterprises may claim political donations to political parties, political associations, and prospective candidates as expenses or losses when filing income tax returns. However, profit-seeking enterprises with an accumulated deficit that has not been made up in accordance with relevant provisions are prohibited from making political donations.

The National Taxation Bureau of Kaohsiung, Ministry of Finance explains that according to Paragraph 2, Article 19 of the Political Donations Act and Article 79 of the Regulations Governing Assessment of Profit-seeking Enterprise Income Tax, profit-seeking enterprises may claim donations to political parties, political associations, and prospective candidates as expenses or losses for the current year when filing income tax returns. The deductible amount cannot exceed 10% of income and the total amount cannot exceed NT$500,000. However, according to Subparagraph 3 of Paragraph 1 and Paragraph 2, Article 7 of the Political Donations Act, profit-seeking enterprises with an accumulated deficit based on their financial report from the previous year that has not been made up in accordance with relevant provisions are prohibited from making political donations.

The Bureau provides the following example: Company A donated NT$200,000 to a political party in 2023 and declared it as a donation expense when filing its profit-seeking enterprise income tax return. However, upon investigation, it was found that the company’s 2022 balance sheet showed an accumulated deficit of NT$1 million that had not been made up in accordance with relevant provisions. This is a situation where Subparagraph 3, Paragraph 1, Article 7 of the Political Donations Act prohibits political donations. Therefore, the Bureau disallowed Company A’s donation expense of NT$200,000.

The Bureau reminds profit-seeking enterprises that when making political donations, they should pay special attention to the accumulated profit and deficit items on the previous year’s balance sheet. If there is an accumulated deficit, such donations cannot be declared as expenses and should be self-adjusted when filing income tax returns. For any questions, you can call the toll-free service hotline at 0800-000-321 or visit the Bureau’s website （https://www.ntbk.gov.tw） to make inquiries online using the National Tax Smart Assistant “National Tax Helper”.

Provided by：Legal Affairs Division  
Contact Person：Section Chief Ms. Lin.            　   Contact Phone:（07）7256600 ext. 7510  
Written by： Chen Jing-Zhong                                Contact Phone: （07）7256600 ext. 7521