According to the National Taxation Bureau of Kaohsiung, Ministry of Finance, since January 1, 2016, for individual transactions of house and land acquired after January 1, 2016 (inclusive), individual house and land transactions income tax returns shall be filed. If a taxpayer fails to file a return due to ignorance of the law or negligence, the National Taxation Bureau will impose an administrative monetary penalty in addition to issuing a Notice of Deficiency. The following is a list of common types of errors that taxpayers should be aware of in order to avoid penalties:
I.Misunderstanding that it is not required to file tax return for selling land only: The transactions of houses, houses and the located bases, or the land for which construction licenses may be issued according to the law are subject to the new individual house and land transactions income tax.
II.The exchanges of houses or land with others, even if there is no monetary proceeds involved, are still house and land transactions tax returns should be filed.
III.Tax returns should be filed regardless of whether there is tax payable or not.
IV.Misunderstanding that the combined sales of the ownership holdings of land (houses) of the same land (building) serial number successively obtained before and after the implementation of the new individual house and land transactions income tax are not subject to the new individual house and land transactions income tax: The successively-acquired houses and land which are sold in a single transaction should be subject to the new individual house and land transactions income tax or the income from property transactions according to the acquisition date of the house and land, respectively.
V.The purchase price paid by the decedent or the giver is mistakenly used as the acquisition cost for the immovable property acquired via inheritance or gift, whereas the acquisition cost shall be the price index-adjusted value of the assessed present value of the house and the announced land current value at the time of inheritance or gift.
VI.Mistakenly listing non-compliant items such as house tax, land value increment tax, management fee, land value tax and mortgage interest as deductions.
The Bureau further clarified that if a taxpayer who should have filed but fails to do so within the prescribed period in accordance with the regulations, he or she will be subject to a behavioral punishment or punishment for tax evasion, whichever is heavier, after the taxing authority’s investigation. Even if there is no tax payable, a behavioral punishment of NT$3,000 to NT$30,000 will still be imposed.
The Bureau urged taxpayers having house and land transactions to carefully examine whether they are subject to the individual house and land transactions income tax and file tax returns as scheduled to avoid penalty. Taxpayers may use the "Individual House and Land Transaction Income Tax Electronic Filing and Payment System (URL: https://tax.nat.gov.tw)" for online filing. Since January 1, 2021, a new attachment upload function has been added to the system, eliminating the need for sending paper-based attachments and making filing more convenient. If errors are found after filing online, the correct information can be re-uploaded within the filing period. However, if the filing deadline has expired, regardless of the original filing method, a filing correction must be made in writing to the tax collection authority in charge.
Contact: Ms. Liao, the officer of the Second Examination Division
TEL: 07-7256600 ext.7257