The National Taxation Bureau of Kaohsiung, Ministry of Finance, expressed that, as prescribed in Paragraph 1 of Article 14-4 of the Income Tax Act, “Income or losses derived from transactions of house and land incurred by an individual provided in Article 4-4, where the house and land were originally acquired at a price, the amount of the income shall be the transaction price after deduction of the original cost and all expenses necessary for acquisition, improvement, and ownership transfer of that house and land.” The “price” in “house and land…acquired at a price”（hereinafter referred to as the acquisition price） refers to the actual amount paid. If the amount actually paid by an individual is less than the amount stated in the house/land sales contract due to a discount or sales allowance negotiated with the seller, the individual should, when filing the personal property and land transaction income tax for the sale of the house/land, declare the actual amount paid as the acquisition cost.

The Bureau provided an example: Party A signed a real estate sales contract with a construction company in February 2017, agreeing that the selling price of the real estate would be NTD14,390,000. After signing the contract, Party A and the construction company negotiated a discount of NTD2,190,000. In April 2022, Party A sold the real estate and reported the price stated in the sales contract, NTD14,390,000, for the personal property and land transaction income tax without deducting the discount. Upon discovering through remittance details and the sales allowance detailed statement issued by the construction company that Party A only paid NTD12,200,000 （NTD14,390,000 – NTD2,190,000）, the Bureau determined that Party A had falsely reported the cost as NTD2,190,000 and requested the payment of the shortfall along with imposing a penalty.

The Bureau reminds individuals that when filing personal property and land transaction income tax, if a discount agreement has been made after signing a sales contract, individuals should declare the actual amount paid as the acquisition cost, even if no new sales contract has been signed. In case of any questions, you are welcome to 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.” 

Providing unit:  Legal Affairs Division
Contact person: Section Chief Kung I-ju;  Telephone: 07)7256600 Ext. 7550
Contributor: Ms. Li            　                       Telephone: (07)7256600 Ext. 7558