The date to recognize “Export Revenue” Regular Mistakes and Negligence When Filing Business Income Tax- part 3
Mar 25

6.
Even though the scrapped products of a Profit-seeking enterprise due to deterioration has been certified by a CPA to adhere to Article 101-1 of Regulations Governing Assessment of Profit-seeking Enterprise Income Tax, it is not enough to have the related worksheets only listing the product names, quantity and the prices to be matching the numbers in the account bookings. Records proving the correctness of the items and quantities of the products, auditing processes, etc. should also be included.

7. When declaring the loss from the liquidation of a foreign company, the related liquidation documents should be presented.

8.
Many mistakenly declare the actual purchasing cost of a sedan purchased by a profit-seeking enterprise (before January 1st, 2004) and recognize it as depreciation expense when the cost exceeds the limit of 2,500,000 NTD as stated in Article 95-13 of Regulations Governing Assessment of Profit-seeking Enterprise Income Tax.

9. If a Profit-seeking enterprise in the situation of omission or under-reporting of income tax due to mistakes in inventory count, it should be handled according to Article 110 of the Income Tax Act as stated in Article 52 of Regulations Governing Assessment of Profit-seeking Enterprise Income Tax.

10. When declaring tax exempt income, profit-seeking enterprises should be aware if there are multiple approved investment plans in the same fiscal year. If a tax offset for shareholders or a five-year tax holiday according to Article 8, 9 or 9-2 of Statute for Upgrading Industries applies, the tax exempt amount should be calculated separately in proportion to the paid-up capital for separate investment plans according to the related regulations.

11. When a profit-seeking enterprise declares the loss from the liquidation of an investee, the year that the loss is to be declared should be the year that the liquidation is completed and all the related liquidation documents are delivered to and recognized by the shareholders or the shareholders’ meeting.

12. According to the Income Tax Act, in case of income tax that has been paid on the income derived outside of the territory of the Republic of China in accordance with the tax act of the source country of that income, the maximum tax deductable should be the additional tax payable computed from the net foreign income after subtracting the related costs and expenses at the domestic tax rate, rather than the amount computed directly from the gross foreign income.

13. The accumulated deficits of an investee incurred before the profit-seeking enterprise started investing cannot be declared as investment loss.

14. A company that lends money to a shareholder or any person without charging interest or charging the stipulated interest at an obviously low rate is violating Article 24-3 of the Income Tax Act.

written by Good Earth


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