萬國法律事務所

As the reform of Taiwan’s Income Tax Act regarding joint tax on buildings and land sales will come into force on 1 January 2016, the Ministry of Finance released the “Operation Rules for Filing Income Tax Returns on Buildings and Land Sales JointAs the reform of Taiwan’s Income Tax Act regarding joint tax on buildings and land sales will come into force on 1 January 2016, the Ministry of Finance released the “Operation Rules for Filing Income Tax Returns on Buildings and Land Sales Jointly” (房地合一課徵所得稅申報作業要點) on 21 July 2015 to remind Taiwan citizens of several changes under the new regulations as follows:

■ When calculating the base income from transactions involving buildings and land, the cost and expense of obtaining the buildings and land will be the deduction from the actual transaction price. In addition, the deed tax, land agent fee, brokerage fee, renovation fee, and truckage for the real estate sales can be deducted from all costs and expenses, to ease the tax burden on taxpayers.

■ After ownership of real estate transaction registration is completed, a profit-seeking enterprise can file a tax return and pay the tax the next year; however, an individual must file a tax return and pay the tax within 30 days after the registration is completed, whether or not the individual owes any tax.

■ Both profit-seeking enterprises and individuals who sell buildings or land obtained after 2 January 2014 and held for a period of no more than 2 years must file a tax return on such buildings and land sales and pay the due tax. In addition, where succession or legacy of real estate are involved, the holding period of the legatee(s), heir(s), or spouse can be cumulatively calculated.

■ Where items of cost and expense are declared in an annual income tax return filed by a taxpayer, the taxpayer must submit the related document or certificates evidencing such costs and expenses.

■ The land value increment tax remains the same. However, in order to avoid double taxation, the amount of the announced land price increment will be deducted from the income tax base. The aim of the legislature with this particular tax reform is to stabilize Taiwan’s property market. ly” (房地合一課徵所得稅申報作業要點) on 21 July 2015 to remind Taiwan citizens of several changes under the new regulations as follows:

■ When calculating the base income from transactions involving buildings and land, the cost and expense of obtaining the buildings and land will be the deduction from the actual transaction price. In addition, the deed tax, land agent fee, brokerage fee, renovation fee, and truckage for the real estate sales can be deducted from all costs and expenses, to ease the tax burden on taxpayers.

■ After ownership of real estate transaction registration is completed, a profit-seeking enterprise can file a tax return and pay the tax the next year; however, an individual must file a tax return and pay the tax within 30 days after the registration is completed, whether or not the individual owes any tax.

■ Both profit-seeking enterprises and individuals who sell buildings or land obtained after 2 January 2014 and held for a period of no more than 2 years must file a tax return on such buildings and land sales and pay the due tax. In addition, where succession or legacy of real estate are involved, the holding period of the legatee(s), heir(s), or spouse can be cumulatively calculated.

■ Where items of cost and expense are declared in an annual income tax return filed by a taxpayer, the taxpayer must submit the related document or certificates evidencing such costs and expenses.

■ The land value increment tax remains the same. However, in order to avoid double taxation, the amount of the announced land price increment will be deducted from the income tax base. The aim of the legislature with this particular tax reform is to stabilize Taiwan’s property market.