Q：
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What kind of situation is applicable for the preferential income tax rate to deduct the losses in the last 10 years for profit-seeking enterprises?
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A：
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Losses incurred in the operation of business in previous shall not be included in the computation for the current year provided, however, that in the case of a profit-seeking enterprise organized as a company that keeps a complete set of account books, uses the Blue Returns as provided in Article 77 in the years such losses occurred and in the year of declaring such losses, or such losses have been duly certified by a certified public accountant and declared within the prescribed period, taxation may be made on its net income after deduction of losses incurred in the preceding ten years as verified and determined by the local collection authority-in-charge.
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Q：
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What is the preferential regulations for profit-seeking enterprises to proceed the tax returns of profit-seeking enterprise income tax with the blue return?
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A：
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Profit-seeking enterprises which proceed the tax returns of profit-seeking enterprise income tax with the blue return are able to enjoy the following 3 types of preferential conditions:
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In the computation of an individual's gross consolidated income, if a taxpayer and his spouse operate two or more profit-seeking enterprises (which is referred as sole proprietorship or partnership), the tax returns are allowed to be proceeded with the blue return. Any loss determined by the tax office may be deducted from his income from profit-seeking as determined by the tax office and the amount of income shall be the balance after such a deduction (which is limited in the same fiscal year), but those which fails to proceed the tax return within the regulated terms are not applicable to this condition.
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For profit-seeking enterprises which are approved to proceed tax returns with the blue return, direct expenses incurred in the course of business for social entertainment for which positive evidence of payment has been received may be listed as expenses or losses in accordance with the article 37th in Income Tax Act.
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Losses incurred in the operation of business in previous shall not be included in the computation for the current year provided, however, that in the case of a profit-seeking enterprise organized as a company that keeps a complete set of account books, uses the Blue Returns in the years such losses occurred and in the year of declaring such losses, taxation may be made on its net income after deduction of losses incurred in the preceding ten years as verified and determined by the local collection authority-in-charge.
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Q：
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What is the regulation for profit-seeking enterprise to proceed tax returns by authorizing a public certified accountant or other legal agent to duly certify the declaration?
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A：
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Profit-seeking enterprises which authorize a public certified accountant or legal agent to proceed tax returns are able to enjoy a variety of privileges for those who proceed tax returns with the blue return regulated in Income Tax Act, which is included the preferential regulations of maximum expense for entertainment at article 37th in Income Tax Act, deduction of losses in the last 10 years at article 39th in Income Tax Act and the offset of profit-and-loss at article 16 in Income Tax Act.
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Q：
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How to apply for the offset of research expenses and investment for Taiwan company limited or partnership limited in accordance with Statute for Industrial Innovation?
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A：
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Company or limited partnership which do not disobey the related laws of environmental protection, labor forces, food safety or involves with any major incident in recent 3 years and invest in the development of research which expenses are applicable to apply for the offset of investment shall submit the related documents to the central competent authority to verify if the research activity is complied with the article 2nd and 3rd in "Regulations Governing the Application of Tax Credits for Corporate or Limited Partnership R&D Expenditures" by 3 months to proceed the tax returns.
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Company or limited partnership which expenses of research is applicable to the offset of investment shall submit the declaration form in the regulated format with related documents to the revenue service office in the place of company to verify the offset of investment upon proceeding the tax returns of profit-seeking enterprise income at that year.
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The required documents to submit is stated at the item 1 of article 12th in "Regulations Governing the Application of Tax Credits for Corporate or Limited Partnership R&D Expenditures"
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Q：
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What is the item to list the expense of research for Taiwan company or limited partnership to apply for the offset of investment pursuant to Statute for Industrial Innovation? What is the item of recognized expense upon application of program? And what is the regulation of deduction?
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A：
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The question can be explained in 3 sides as following:
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1.
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The so-called “Expense of Research” is to referred to the expenses incurred from the research activity for a company or limited partnership as following:
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(1)
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The salary for the personnel who involve with the research development.
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(2)
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The expense incurred from consuming equipment, material, ingredient or sample for research development with the record of purchase which is related with the research program.
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(3)
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The expenses or depreciation incurred from the purchase of royalty, expertise and copyright for research development.
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(4)
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The expense of system, software or special and professional database for research development.
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For a company or limited partnership which do not set up a research development unit, but deploying the research personnel to undertake research activities and dividing the various expense items into research related or non-research related, the following documents are required to submit to the revenue service office in the place of company or limited partnership to verify amount of offset of research expense and investment along with the aforementioned expense items from 1, (1) to (4):
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(1)
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The related documents which is stated the job content and working hours to prove the personnel who is involving with the research development.
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(2)
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The documents of purpose of research which are stated the purpose of purchase and content along with the aforementioned items 1, (2) to (4).
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2.
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The expense of application of recognized program as following:
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(1)
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The expense or depreciation incurred from the purchased expertise for research development at that year.
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(2)
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The expense of system, software or special and professional database for research development.
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(3)
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The expense incurred from employment of foreign teacher or researcher in the foreign university or research entity.
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(4)
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The expense incurred from the cooperative research development with domestic or foreign company or research entity for a company or limited partnership.
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3.
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The expense incurred from research development for a company or limited partnership at the same fiscal year shall be offset the amount of profit-seeking income tax with the maximum amount of expense in 15% or 10% within 3 years. It is not allowed to alter once the percentage is determined and the maximum percentage shall be 30% of the profit-seeking income at that year.
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