萬國法律事務所

Beware the legal consequences of being a spendthrift tax debtor, as Taiwan’s tax authorities are now authorized under Article 17-1 of the Administration Enforcement Law to take extreme measures against tax debtors whose tax arrears exceed NT$ 10M if they are found to live a life of luxury.

According to Director-General of Administrative Enforcement Agency, as of 3 June 2010, the date on which Article 17-1 of the Administration Enforcement Law took effect, there are 1,267 individuals owing taxes in amounts exceeding NT$ 10M, including the notorious Jack Sun, and Article 17-1 is specifically aimed at such tax debtors who live extravagantly.

Under Article 17-1, administration enforcement agencies may issue orders to prohibit such tax debtors from engaging in certain behaviors if they are found to lead an extravagant lifestyle. For instance, such tax-debtor individuals may be prohibited from purchasing certain types of vehicles, buying, borrowing or using products or services exceeding a price of NT$ 2,000, patronizing specified establishments or facilities, bestowing or lending money in excess of NT$ 2,000, making investments, and engaging in other actions that the agencies deem inappropriate for persons who owe a significant tax debt.

In addition, the monthly expenditure of such tax debtors is capped at a certain amount, depending upon on their residence. For example, the spending limit for those tax debtors residing in northern Taiwan, which includes Taipei, Keelung, Taoyuan and Hsinchu, is capped at NT$ 24,000 per month, while for those residing in Southern Taiwan, which includes Chiayi, Tainan, Kaohsiung, and Pingtung, is capped at NT$ 18,000 per month.

If the tax debtors violate the orders issued by the administration enforcement agencies and refuse to comply upon notice of violation, the administration enforcement agencies may restrict their residences or apply to the court to take them into custody.

The Director-General of Administrative Enforcement Agency urged the public to be vigilant with respect to every expenditure made by these tax debtors and to report to the agencies any inappropriate spending so that the Government may effectively force the tax debtors to comply with the law.