The Taipei National Tax Administration (TNTA), Ministry of Finance indicated that due to the heavy rain in recent days, not only people’s vehicles are submerged in water, but also houses and furniture are seriously damaged by floodwater. While getting recovery, people shall not forget to apply for certificate of disaster losses in order to file for deduction of individual income tax in May of the preceding year.
In an attempt to protect the interests and rights of people, the TNTA summarized the relevant regulations concerning the itemized deduction for claiming losses from disaster as follows:
1.The scope of claiming the losses from disaster deduction: Losses from damaged or destroyed properties belonged to a taxpayer, his/her spouse and/or dependents may be claimed for such deduction, and the amount of losses from disaster deduction shall accord with the certificate verified and issued by the tax authority; however, no deduction shall be made for the portion of loss for which insurance benefit or relief has been received as well as the selling price of the residual value shall be subtracted from such amount of losses.
2.Deadline for such application: According to the “Income Tax Act” and “Enforcement Rules of the Income Tax Act”, people suffering from property losses shall report and request the tax authority to conduct an investigation. Within 30 days after a disaster happens, a checklist of losses and evidential documents (such as pictures of damaged property remarked with the location and the date of disaster) shall be prepared for the application of on-site investigation conducted by the local National Tax Administration which has the jurisdiction over the owner’s domicile or properties.
The TNTA further explained that after receiving the certificate of disaster issued by the tax authority, taxpayers may list the amount of such losses shown on the certificate for deduction on their tax returns of the taxable year in which the disaster took place. If the amount of declared losses is no more than NT$150,000, paper review may be applicable instead of on-site investigation. Nevertheless, the losses from disaster deduction shall neither include the losses caused by personal negligence or theft, nor be deferred to the subsequent years.
The TNTA reminded people, for the convenience of applying such request, application form may be downloaded from the TNTA website (http://ntat.gov.tw). If there is any question, a toll-free service line 0800-000-321 is available, or they can consult the TNTA, its branch or offices for further information.