The National Taxation Bureau of the Northern Area (NTBNA), MOF, stated that various types of overseas income obtained by profit-seeking enterprises from investing in offshore financial products, which are not within the scope of withholding, fall under the category of offshore income. Pursuant to Paragraph 2, Article 3 of the Income Tax Act, such income must be combined with domestic income for the assessment of profit-seeking enterprise income tax.

The Bureau explained that profit-seeking enterprises with their head offices within the territory of the Republic of China (R.O.C.) are required to pay profit-seeking enterprise income tax on their total profit-seeking enterprise income derived both within and outside the R.O.C. Therefore, all types of overseas income derived from investments in offshore financial products—including overseas profit income (such as dividends from offshore funds), overseas interest income (such as distributions from offshore bond funds), and overseas income from property transactions (such as gains from the disposal of offshore funds)—must be included in the profit-seeking enterprise’s income for the current year.

For example, Company X purchased an offshore bond fund in 2024. Due to negligence of its accounting staff, who failed to carefully review the “2024 Various Types of Overseas Trust Income Detail Notification” sent by the financial institution, the company failed to include its distributed overseas interest income of NT$500,000 in its income tax return. This resulted in an under-reporting of income, leading to a back tax assessment of NT$100,000 and the imposition of a fine upon discovery.

The Bureau would like to remind taxpayers that overseas income is not within the scope of income data provided by tax authorities for inquiry. Profit-seeking enterprises should double-check whether such income has been included in their profit-seeking enterprise income tax returns to avoid back taxes and penalties. If a company discovers an under-reporting of overseas income of its own accord, it may, pursuant to Article 48-1 of the Tax Collection Act, file a supplementary tax return and pay the tax owed to its local national taxation bureau before a case is brought about by an informant or an investigation is initiated by the tax authorities. This will protect their own rights and interests and help them avoid penalties. Profit-seeking enterprises that still have questions may visit the website of NTBNA to inquire about the relevant laws or call the toll-free service number 0800-000321 for detailed consultation services.

〔Contact person:Ms. Liu, Section Head of Profit-Seeking Enterprise Division.; Tel:(03)3396789, ext. 1350〕