Even if a profit-seeking enterprise suspends operations, it should still file a profit-seeking enterprise income tax return in accordance with regulations.

The Taipei National Taxation Bureau of the Ministry of Finance stated that profit-making enterprises that have been approved to suspend operations should still file profit-making enterprise income tax settlement returns within the prescribed time limit in accordance with Article 71 of the Income Tax Act and the Ministry of Finance's Letter No. 38268 dated November 22, 1979. If the settlement returns are not filed within the time limit, and the tax authorities determine that there is a tax payable, a late reporting fee or a default reporting fee will be imposed.

The bureau further explained that if a profit-making enterprise fails to file a settlement declaration within the prescribed time limit, and is notified by the tax authority and is required to make a supplementary declaration within 15 days from the date of receipt of the notice of late declaration, and it is determined that there is a tax payable, in accordance with Article 108 of the Income Tax Act, a late declaration fee of 10% of the determined tax payable shall be levied [the maximum amount shall not exceed NT$30,000 (the same below) and the minimum shall not be less than NT$1,500]; if the supplementary declaration is made after the deadline or is still not made, the tax authority will levy an additional 20% late declaration fee based on the determined tax payable (the maximum amount shall not exceed NT$90,000 and the minimum shall not be less than NT$4,500).

The bureau gave an example, saying that Company A suspended operations in the middle of 2013 and failed to file a business income tax return in May 2014. The bureau filled out a late filing notice and notified Company A to make a late filing. Company A made the filing within the statutory filing period. After investigation by the tax collection agency, the tax payable for that year was determined to be NT$400,000, and an additional late filing fee of NT$30,000 (NT$400,000 x 10% = NT$40,000, with a maximum limit of NT$30,000) was levied.

The bureau reminds that if a profit-making business suspends operations in fiscal year 2014, please remember to file a settlement declaration within the prescribed period to avoid being charged late reporting fees or non-reporting fees due to negligence. If you have any tax questions, please contact the local branch or tax office of the National Tax Bureau to inquire about relevant regulations or call the toll-free service number 0800-000-321 for inquiries.

(Contact Person: Section Chief Chen of the Legal Affairs Group; Tel: 2311-3711 ext. 2071)