According to item 4.3 in amended implementation note of Business Tax Act, when selling taxable goods or services to diplomatic missions or personnel and issuing vouchers, businesses should specify the name of the diplomatic mission or personnel and the tax exemption card number on the vouchers and have the purchase personnel of the diplomatic mission or the diplomatic personnel sign on the voucher. Then tax exemption is applicable.

The government uniform invoices with tax exemption obtained by the diplomatic personnel cannot be used to exchange prize in the Uniform Invoice Lottery Draw.

The tax paid by profit-seeking enterprises on behalf of the foreign employees cannot be recognized as business expense or loss if it is not part of the remuneration according to employment contract or other documents that provide sufficient proof.  It is recognized as gift that foreign employees obtain from profit-seeking enterprises according to Category 10 “Other Income” under the first item of Article 14 in Income Tax Act and should be taxed as the foreign employees’ income tax according to the regulations.

According to the change in the explanation letter above, the competent authority is adjusting the explanation letter towards fairness to prevent high salary foreign employees from avoiding tax by means of having enterprises to pay tax on their behalves.

The Ministry of Finance announced that foreign taxpayers can file income tax online starting May 2012 and there will be no need to send payment information to the tax office regardless if the tax is paid in cash or by debit card.

However, if the foreign taxpayer is filing a late return, it cannot be done online.  For the convenience of both the taxpayers and the tax office, late returns can be filed electronically if they are done before December 12, 2012.

According to the amended laws, 3 days after transferring real estate ownership or closing a real estate deal, the general public, real estate agents or land administration agents must register the case including the purchase price with the competent government department.

If real estate agents or land administration agents are found to register false purchase price, they will be fined NTD 30,000 to NTD 150,000; in the case of the general public, they will only be fined NTD 30,000 to NTD 150,000 when failing to correct the registered purchase price after the government requests the correction.

When any organization, institution, school, enterprise, bankruptcy estate, or practitioner of profession pay salary, interest, rental, commission, royalty, cash award or prize given in a contest or game competition, prizes of a chance winning, retirement pay, severance pay, separation pay, resignation pay, life-time pension, old-age pension not covered by insurance benefits, reward for information or accusation, and fees for professional practices, withholding agents involved shall withhold and pay tax at the time of payment.  Withholding agents failing to withhold income tax according to the regulations will be ordered to withhold and pay the unpaid or underpaid taxes, and also pay a penalty of 100% - 300% of the unpaid or underpaid amounts.

If withholding agents have filed non-withholding tax statements and send them to the income receivers, and the income receivers have filed and pay the tax according to the regulations, then the withholding agents will not be ordered to pay the taxes, but will still be ordered to pay a penalty of 100% the unpaid amount for failing to withhold tax.  If withholding agents haven’t withheld tax according to the regulations, but file non-withholding tax statements within the filing period and pay the tax and the interests before the tax office finds out, then the withholding agents will not be penalized.

Because the agreement abolishes double-taxation, Taiwanese and Swiss will both avoid double taxation.  In addition, tax on business income, dividends, interests, royalties, etc. that Taiwanese have to pay in Switzerland may also be lowered.

The Legislative Yuan passed amendments to part of the articles in Income Tax Law:  The due dates for withholding agents to file Withholding and Non-Withholding Income Tax Statements for various types of income and to mail the statements are postponed to February 5^th and February 15^th, when there are more than 3 days of national holidays during the filing period. 

The Ministry of Finance announced the amendment is effective for the long Chinese New Year holidays in January 2012 to alleviate the workload of tax filing departments.  According to the current Income Tax Law, the due dates for withholding agents to file Withholding and Non-Withholding Income Tax Statements and to mail the statements to the taxpayers are January 31^st and February 10^th.

The due date for filing 2011 Withholding and Non-Withholding Income Tax Statements for income and dividend is still January 31^st, 2012.  Even though the filing period is around New Year and Chinese New Year holidays, the Ministry of Finance decided not to extend the filing period.  However, online filing is available as usual during New Year and Chinese New Year.

According to the Tax Laws, withholding agents failing to withhold income tax according to the regulations must pay the unpaid or underpaid taxes, file the amended withholding tax statements and pay a penalty of 100% of the unpaid or underpaid amounts.

IASB has announced that the effective date of IFRS 9, accounting for Financial Instruments, is postponed from 2013 to 2015.

IFRS 9 reduces Financial Instruments classifications from 5 to 2; the financial assets, such as Hold to Maturity Bond, Low Liquidity Bond or Structured Financial Instruments, which were accounted for on cost basis, will be accounted for on fair market value basis under the new the classification system.  In the future, when assessing market values, some assets may incur loss; the book value will be impacted significantly.