If a profit-seeking enterprise is unable to pay taxes within the statutory period due to objective financial difficulties, it may apply to the tax collection agency for installment payment of taxes in accordance with Article 26-1 of the Tax Collection Act. The added interest is essentially the consideration for the cost of using money and is a cost borne by the profit-seeking enterprise. It may be listed as an expense in accordance with Article 97, Paragraph 17 of the Profit-Seeking Enterprise Income Tax Audit Rules.
The Southern District National Taxation Bureau of the Ministry of Finance stated that according to Article 97, Paragraph 17 of the Profit-seeking Enterprise Income Tax Audit Standards, if a profit-seeking enterprise has the following circumstances, all interest paid can be listed as an expense:
1. Interest accrued on the amount of provisional tax paid in arrears pursuant to Article 68 of the Income Tax Act.
2. Interest accrued on the amount of tax that is assessed to be overpaid due to the excess of the costs, expenses, or losses reported in the financial statements pursuant to Article 100-2 of the Income Tax Act.
3. Interest added to tax installment payments made pursuant to Article 26-1 of the Tax Collection Act.
4. Interest added to the amount of taxes to be paid as determined by administrative relief procedures in accordance with Article 38 of the Tax Collection Act.
5. Voluntarily file a supplementary return and pay the interest on the unpaid taxes in accordance with Article 48-1 of the Tax Collection Act.
6. Interest on overdue payments accrued in accordance with various tax laws.
The Bureau specifically reminds that the above-mentioned interest expenses can all be listed as expenses, but the late reporting fees, default reporting fees, late payment fees, and various fines stipulated in various tax laws are penalties for violations of various tax laws. In order to avoid offsetting the effect of penalties, they shall not be listed as expenses or losses in accordance with Article 38 of the Income Tax Law. Profit-making enterprises should pay attention to relevant regulations when filing profit-making enterprise income tax settlement declarations to avoid making incorrect declarations and incurring additional taxes.
Contact person for press release: Auditor Xu of the Business Taxation Group, 06-2223111 ext. 8056
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