Basic Income Shall Be Added for Profit-seeking Enterprises-Company Formation_Trademark Registration_Tax Service - Hong Kong CPA

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Taxation - Taiwan

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Basic Income Shall Be Added for Profit-seeking Enterprises

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Q：	What kind of tax-free income shall be added to the basic income of profit-seeking enterprises?
A：	Earnings received by securities or futures. Earnings received by the businesses from international financial branches. Earnings received by the international insurance businesses from international insurance branches. Earnings received by the international insurance businesses from international insurance branches, which is not included the earnings incurred from the operation of funds within the territory of Republic of China. Newly emerging, important and strategic industries, manufacturing industries and related technical services industries, important investment and technology industries, headquarter of operation, encouraged private institutions by involvement of transportation construction and public construction, science industries and transferee of equipment or applicable software to maintain, the tax-free income (5 years) applicable to those who were consolidated and enjoyed the privileges of preferential rental rate. Double deductible amount of expenses of development of intellectual property. Double deductible amount of salary expenses incurred by hiring new employees with the nationality of Republic of China. Double deductible amount of salary expenses incurred by hiring new employees under the age of 24 and increase the basis of salary of employees with the nationality of Republic of China.
Q：	Is it possible to deduct the losses of transaction of securities (futures) for profit-seeking enterprises?
A：	The losses of transaction which are approved by the revenue service offices after the implementation of AMT can be deduct priorly in the course of computation of transaction income of securities (futures) within 5 years from the year of transaction. Regarding to the sequence of deduction, the amount shall be deducted pursuant to the year of occurrence of losses orderly. In the condition of no any income in each category to deduct or no balance left after deduction at that fiscal year, the amount of losses are allowed to be postpone to deduct at the year of next year.
Q：	How to compute the basic income tax for profit-seeking enterprises in Taiwan?
A：	The amount of regular income tax of a profit-seeking enterprise shall be the balance of tax payable calculated in accordance with the Income Tax Act, after subtraction of any investment tax credits in accordance with the provisions of other laws. The amount of basic income tax= The amount payable of tax return-The amount of deduction for investment of tax return
Q：	What is the connection with the basic income tax and income tax?
A：	The amount of income tax which is higher than or equal to the amount of basic income tax for profit-seeking enterprises shall be computed and recognized pursuant to Income Tax Act and the provisions of other laws to pay the income tax payable at that year for profit-seeking enterprises. For the profit-seeking enterprises which amount of income is less than the basic income tax, the income tax payable shall be paid not only in accordance with the Income Tax Act and provisions of other laws to compute and recognize, but also in accordance with the difference between income tax and basic income tax to recognize. The aforementioned difference is not allowed to be deducted from the amount of deduction from investment pursuant to provisions of other laws.
Q：	What kind of punishment would be faced for profit-seeking enterprises which fail to compute and declare the basic income tax in Taiwan?
A：	The basic income which was computed and declared in accordance with the provisions but suspected to miss the declaration shall be doubled the amount to fine the profit-seeking enterprises. The basic income which was failed to compute and declare in accordance with the provisions and found to be proceeded taxation by the revenue service offices shall be recovered the amount of taxation and tripled the amount to fine the profit-seeking enterprises.

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