2024/06/07 Share information to Facebook Share information to Line Forwarding information by email Share in

The National Taxation Bureau of the Northern Area(NTBNA), M.O.F., stated that according to Paragraph 1, Article 24 of the Income Tax Act, the amount of the profit-seeking enterprise income should be calculated by net income after deducting costs, expenses, losses, and taxes. Expenditures incurred by profit-seeking enterprises in tearing down superficies and grading the land should be classified as the cost of land. Simultaneously, based on matching principle, net income of selling land should deduct the expenditures.

The Bureau explains using an example: Company A declared other loss more than NT$14 million in profit-seeking enterprise income tax return of 2020. After inspection, it was found that expenditures were incurred by the company in tearing down superficies and grading. Based on matching principle, the expenditures were used to render land available for sale, and should be reported as the cost of land. The Bureau corrected the classification from other loss to the cost of land, leading to additional tax liability of NT$2.9 million.

The Bureau would like to especially remind enterprises, when declaring expenses or losses, to pay attention to the above regulation and report items under the correct classification. If there are any questions, please visit the website of NTBNA( inquire about the relevant laws or call the toll-free service number 0800-000321 for detailed consultation services.

〔News contact: Ms. Liu, Head, Profit-seeking Enterprise Income Tax Division.
Tel. No. (03)3396789, Ext. 1330〕