According to the National Taxation Bureau of Kaohsiung, Ministry of Finance, if a foreign profit-seeking enterprise engaging in international transportation, contract construction, technical services, or leasing of machinery and equipment within the territory of our country has difficulties in allocating costs and expenses, it may apply to the Ministry of Finance for the application of the provisions of Paragraph 1, Article 25 of the Income Tax Act, which stipulate that 10% of the business revenue of the international transportation business and 15% of the business revenue of the other businesses within the territory of our country shall be the income of profit-seeking enterprises in our country, and subject to the profit-seeking enterprise income tax.

The Ministry of Finance reviewed the "examination principles of a foreign profit-seeking enterprise's application for applying the provisions of Paragraph 1, Article 25 of the Income Tax Act to calculate income" in accordance with the practical needs of the audit, and issued the following amendments on May 29, 2023, with the following highlights:
1.In accordance with the amendment to the statute of limitations for the right of claim under public law under Paragraph 1, Article 131 of the Administrative Procedure Act, the period for filing an application is extended from 5 years to 10 years. (Point 6)
2.The amendment added a provision on the approved applicable, period, the maximum applicable period for the application of foreign profit-seeking enterprises approved after May 29, 2023 is 5 years (except for shorter contract periods, in which case the contract period shall prevail): Upon expiration of the approved applicable period, a new application may be filed. (Point 11)

The Bureau would like to remind applicants that, for those cases meeting the regulations, and the time gap between the date of application and the date of receipt of income for those cases meeting the regulations is more than 5 years, but not more than 10 years, including those that have been filed, but have not been accepted by the taxing authorities due to the expiration of the 5-year statute of limitations, foreign profit-seeking enterprises are eligible to apply for the application of provisions of Paragraph 1, Article 25 of the Income Tax Act to calculate income within the amended time limit.

Provided by: Profit-seeking Enterprise Income Tax Division
Contact person: Ms. Wang     telephone number: (07)7256600 ext.7140