萬國法律事務所

The Taipei High Administrative Court concluded in a recent case that the authority must bear the burden of proof with respect to the facts that must be established where a gift tax is sought to be collected. The Court specifically indicated that merely proving a transfer of property is insufficient, and the authority must further present evidence as to the parties’ consent to the gratuitous transfer.

In this case, the taxpayer was previously ordered by the National Tax Administration of Northern Taiwan Province (NTA) to pay a total amount of NT$ 4,580,000 as gift tax and the fine imposed thereon as the NTA found that the taxpayer had not paid the gift tax derived from her transfer of NT$ 14,000,000 in cash to another. The Ministry of Finance (MOF) affirmed the NTA order during administrative appeal, however, both rulings were finally reversed by the Court.

The fact presented to the Court showed that the taxpayer had withdrawn NT$ 14,540,000 from her bank account in March 2005 and deposited part of the cash, NT$ 14,000,000, into another person’s account three months later. The taxpayer insisted that the cash transfer at issue was not made as a gift, and was rather for the sole purpose of a loan. The Court found in favor of the taxpayer as the NTA failed to prove that such a transfer was made as a gift.