National Taxation Bureau of the Central Area, Ministry of Finance, stated that where a profit-seeking enterprise is unable to provide, by the deadline for filing the annual  income tax return, the financial statements of its controlled foreign company (CFC) audited and attested to by a Certified Public Accountant (CPA) or other supporting documents that may substitute for such financial statements, it may apply for an extension to provide such documents pursuant to Article 10 of the Regulations Governing Application of Recognizing Income from Controlled Foreign Company for Profit-Seeking Enterprise; the maximum extension period is six months and can be granted only once. For example, in the case of a profit-seeking enterprise adopting the calendar year as its fiscal year for taxable year 2025, if it has applied for an extension before the filing deadline of the annual income tax return (i.e., before June 1, 2026), it may submit the required documents no later than December 1, 2026.

The Bureau particularly reminds profit-seeking enterprises that only when the required documents are submitted within the prescribed deadline may the losses of a CFC assessed by the tax authority be sequentially deducted from the CFC’s current-year earnings for up to ten years, starting from the year following the year in which the losses occurred. In addition, as stated in the first paragraph, where a profit-seeking enterprise provides the required documents within the prescribed deadline, it may select to defer the valuation gains or losses arising from financial instruments measured at fair value through profit or loss (FVPL) held by a CFC and add such gains or losses in the CFC’s current-year earnings upon realization.  

The Bureau urges profit-seeking enterprises to keep track of any applicable deadline and provide the required documents on time to safeguard their rights and interests. If you have any questions, please call our toll-free service number 0800-000321 for assistance, and we will do our best to serve you.

Contact person: Profit-seeking Enterprise Income Tax Division, Ms. Lai.
Tel: (04)2305-1111 ext. 7123.