Corporate Income Tax Filing Season Begins, Note 5 Major Amendments

Central News Agency (CNA) reporter Lu Yen-tzu, Taipei, 1st – The 2024 corporate income tax final settlement filing for fiscal year 114 began in May. This year, there are five major amendments to the corporate income tax final settlement return, including the addition of two deduction items under the Statute for Industrial Innovation: "AI products or services" and "energy saving and decarbonization," as well as an increase in the deduction rate for sports donations to 175%.

Firstly, in conjunction with amendments to the Statute for Industrial Innovation, two new investment deduction items have been added this year: AI products or services, and hardware, software, technology, or technical services related to energy saving and decarbonization.

The National Tax Administration explained that companies or limited partnership businesses investing in related items, with a total expenditure amount between NT$1 million and NT$2 billion in the same tax year, can choose to deduct either 5% of the expenditure amount (deducted in the current year) or 3% (deducted over three years) from the payable corporate income tax, limited to not exceeding 30% of the current year's payable corporate income tax.

Simultaneously, following the amendment of the Sports Industry Development Act last year, donations to professional or amateur sports industries recognized by the Ministry of Sports can be deducted at 175% of the donation amount, up to NT$10 million. However, if the donation receipt date is before July 24, 2024 (fiscal year 114), the increased deduction ratio remains 150%.

The National Tax Administration reminded that if a corporate entity has a related party relationship with the recipient professional or amateur sports industry, only 100% of the donation amount can be deducted. If the donation is made to key professional or amateur sports industries specially approved by the Ministry of Sports, or to organizers of key sports events announced by the Ministry of Sports, the NT$10 million limit does not apply.

Thirdly, the National Tax Administration stated that in accordance with the Cultural and Creative Industries Development Act and the Biomedical Development Act, investors meeting certain conditions can apply for shareholder investment deductions starting from fiscal year 114. New shareholder investment deduction declaration fields have been added to the tax reduction and exemption filing forms.

Other key amendments to the final settlement return include the removal of the "certifying accountant's seal" field from the "Corporate Income Basic Tax Declaration Form" because it is a supplementary form for calculating the difference between the basic tax amount and the general income tax amount in the "Profit and Loss and Tax Calculation Form." Also, in accordance with commercial accounting treatment standards, cumulative impairment fields such as "investment property" and "mineral resources" have been added to the balance sheet.

Furthermore, the National Tax Administration reminded that to comply with the national policy promoting diversified long-term care services, this year's expanded written review implementation guidelines have added that small long-term care service institutions with total net operating revenue and non-operating revenue not exceeding NT$10 million can apply the expanded written review system.

The National Tax Administration explained that taxpayers should utilize online transmission for filing between May 1st and June 1st as much as possible. Except for special industries with unique accounting items such as financial and insurance industries, which are not applicable for online and media filing, and overdue filing cases, and initial year consolidated tax filing cases for parent companies and their subsidiaries, all other filing cases can be handled via online or media methods for final settlement filing.

The National Tax Administration explained that after completing online filing for corporate entities and organizations, relevant forms and attachments can be uploaded and submitted via the e-filing and tax payment system by June 29th, or mailed to the local National Tax Administration's branch, collection office, or service office by June 30th. After uploading via the e-filing and tax payment system, be sure to check the Ministry of Finance's e-filing and tax payment service website to confirm successful upload of relevant data. (Editor: Lin Shu-yuan) 1150501

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