Regulations Governing Application of the Place of Effective Management<br> Article 5
When the tax authorities conduct audits in accordance with Article 43-4 of the Income Tax Act, they are responsible for providing the proof of the constituent elements. However, the domestic resident, domestic profit-seeking enterprise, or foreign profit-seeking enterprise with a fixed place of business in the Republic of China which makes significant management decisions still has the obligation to assist in the reporting of the required information according to the Tax Act and the Regulations.
When conducting an investigation, tax authorities may, pursuant to Article 30 of the Tax Collection Act, require the domestic resident, domestic profit-seeking enterprise, or foreign profit-seeking enterprise with a fixed place of business in the Republic of China making significant management decisions to provide information related to such investigation.
After a foreign profit-seeking enterprise is recognized by the tax authorities to be eligible under Article 43-4 of the Income Tax Act, such foreign profit-seeking enterprise shall, within one month following the tax authorities' recognition, decide on its own discretion to appoint the domestic resident or the responsible person of the domestic profit-seeking enterprise making significant management decisions to act as its responsible person in the Republic of China, and shall prepare the documents specified in the preceding article, file for registration of the place of effective management at the tax authorities of the domestic resident's registered household or of the domestic profit-seeking enterprise's registered place, and such registration shall take effect on the registration date. Where the registration of the place of effective management is not filed within the prescribed time limit, the place of effective management shall take effect from the date following the end of the one-month period.
Within three years following the date the Regulations come into force, the tax authorities shall report to the Ministry of Finance for an approval with respect to a foreign profit-seeking enterprise having been recognized by the tax authorities to be eligible under Article 43-4 of the Income Tax Act based on the preceding three paragraphs; if necessary, the prescribed time limit may be extended for another three years by the Ministry of Finance.