萬國法律事務所

On March 23, the Council of Grand Justices, Judicial Yuan issued Interpretation No. 698, confirming that the Commodity Tax Law, which subjects color TVs to taxation, does not violate the principle of equality under Article 7 of the Constitution. Further, the administrative explanation, which states that the selling of color TV components without a TV tuner does not fall within the scope of the aforementioned regulation, does not violate the principles of taxation by law or of equality.

The background of this Interpretation involves a long-running legal dispute between Da-Tung Corporation and the Ministry of Finance (MOF). In 2003, Da-Tung sent a shipment of color TV components to RT-Mart Corporation, including both TV Monitors and TV Tuners. The MOF’s Taipei National Tax Administration determined that said shipment contained components that may be assembled into a fully functional color TVs, and thus levied a commodity tax. Da-Tung responded with litigation against MOF, but has not succeeded in relieving itself from the relevant tax duties and fines. As a final approach, Da-Tung requested an interpretation from the Council of Grand Justices, Judicial Yuan.

In its decision, the Council first ruled that the specific provision of the Commodity Tax Law, which pursues specific purpose, such as national tax income, industrial development policy, and energy conservation, is not formed in a way that falls outside of the legislative discretion. Thus, the provision is not unconstitutional. Moving on to the administrative explanation, the Council opined that as the explanation has not improperly expanded the definition of color TVs or the scope of provision under the Commodity Tax Law, and as there is no unequal treatment involved, there is no violation of the principle of taxation by law and the principle of equality.