萬國法律事務所

Thirteen years ago the local government converted a portion of the land located in the Dasi Buting Repartition District of Taoyuan County into public use land. However, the local tax office has continued to levy land value taxes on the landowners whose land was converted and became public facilities during this 13-year period. Although last year the landowners applied for a refund of the overpaid taxes from the past 13 years, they were prevented from doing so by the then-current Article 28 of the Tax Collection Act (TCA) and were only refunded the overpaid taxes from the past 5 years. Fortunately for the landowners, they may now request a full refund of the overpaid taxes from the earlier past years due to an amendment of Article 28 of the TCA, which is also known as the “C.V. Chen Clause.”

The so-called “C.V. Chen Clause” originated from an administrative error committed by the Taipei Revenue Service (TRS), which resulted in a residential property owned by a family relation of well-known Taipei attorney, C.V. Chen, being assessed at a commercial rate rather than at a residential rate for a period of 15 years. Although the TRS acknowledged that the house tax was erroneously assessed due to its own internal administrative error, it agreed to refund overpaid taxes only for the most recent past 5 years, citing the then-current Article 28 of the TCA. Mr. C.V. Chen insisted on pursuing administrative appeals under the conviction that the people should not have to bear the adverse consequences of the Government’s mistakes. The case thus went through administrative appeals but eventually failed as Article 28 of the TCA expressly set a 5-year time limit for refund claims.

The public was astonished by the judgment and this prompted the Legislative Yuan to pass an amendment to Article 28 of the TCA on January 6, 2009, expressly providing that where a taxpayer overpays taxes because of errors attributable to a Government agency, he/she may obtain a refund of the overpaid taxes in full and the 5-year time limit shall not apply.

Thanks to the “C.V. Chen Clause,” the landowners in the Dasi Buting Repartition District of Taoyuan County have recently received checks from the local government for the erroneously-assessed taxes beyond the most recent past 5 years, and the refunds total in excess of NT$ 2.02M for 2,464 tax-refund applications.