The Taxation Bureau of the Northern Area, Ministry of Finance (NTBNA, MOF), stated that, as stipulated in Article 39 of the Income Tax Act, when profit-seeking enterprises deduct the verified losses of each of the former ten years from the current year’s net profit, the investment income of each such year that is not included in taxable income under Article 42 of the same Act shall first be applied to offset the verified losses of that year, and any remaining loss may thereafter be deducted from the current year’s net profit.

The Bureau recently reviewed Company A’s 2022 profit-seeking enterprise income tax return, in which the company reported a NT$10 million deduction for losses carried forward from the former ten years. Upon review, it was found that NT$4 million of non-taxable investment income in the loss year (2019) should have been applied first to offset the losses. Accordingly, the Bureau reassessed the case, allowing a deductible loss of NT$6 million and assessing additional tax. According to Article 100-2 of the Income Tax Act, from the day following the statutory deadline for filing the final return through the date of payment of the additional tax, interest shall be calculated on a daily basis and collected together with the additional tax assessed, commencing at the fixed interest rate for one-year time deposits of the postal savings system in effect in 2023.

The Bureau would like to remind enterprises to comply with the relevant regulations when reporting deductions for losses from the former ten years and to correctly calculate the amount of such deductible losses, so as to avoid over-deduction resulting in additional tax assessments and interest charges. If you have any questions, please visit the NTBNA website (https://www.ntbna.gov.tw) to learn about the relevant laws, or call the toll-free service number 0800-000321 for detailed consultation services.

〔Contact person：Mr. Zhang, Head, Profit-seeking Enterprise Income Tax Devision; Tel：(03)3396789, ext. 1320〕