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Taiwan Concerned At Non-Declaration Of Property Income

by Mary Swire,, Hong Kong

30 December 2013

Taiwan's National Taxation Bureau (NTBT) has confirmed that the obligation to declare, on an income tax return, profits for an off-plan property transaction cannot be avoided merely because of the involvement of a non-resident.

NTBT indicated that, if there is any income earned from the sale of off-plan properties (before the completion of construction), such income shall be included in the annual amount of consolidated income and be calculated for income tax, and the obligation does not vary due to the identity of the seller.

The agency pointed that out, with the housing market having flourished in recent years, various schemes have emerged, especially the purchasing of off-plan properties under another's name, particularly through re-sale agreements with foreign connected parties. NTBT has therefore found that a small number of off-plan property buyers, focusing on short-term capital gains, could be liable, in addition to the due taxes, for substantial penalties.

NTBT explained that the income earned from an off-plan property transaction is to be calculated by subtracting the original cost and related fees for obtaining and transferring ownership from the transaction price. The off-plan properties' purchase contracts, payment receipts and documents of expenditure shall be submitted to the tax authorities while filing a tax return for assessment.

It added that, where a taxpayer voluntarily files a supplementary tax declaration to the tax authorities and makes supplementary payment covering the undeclared tax amount, the taxpayer may be excused from any or all of the relevant penalties, as long as he/she/it is not the subject of a case brought about by an informant, or under investigation by an investigator appointed by the tax authorities or the Ministry of Finance.

A comprehensive report in our Intelligence Report series dealing with the issues raised by international property investment, and the possible taxation implications raised by such purchases, with an account of the likely (and some less obvious) potential countries for your consideration, is available in the Lowtax Library at and a description of the report can be seen at
TAGS: compliance | Finance | tax | tax compliance | tax avoidance | law | real-estate | corporation tax | Taiwan | construction | penalties | individual income tax | Tax

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