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法律與法規命令

Tax Act:
Regulations Governing Application of Income Calculation from Controlled Foreign Company for Individual
Article 6
Content:
To recognize the business income based on his/her direct holding ratio and holding period of the shares or capital of a controlled foreign company, an individual shall deduct the legal reserve or restricted distributable earnings in accordance with the laws of the country or jurisdiction of the controlled foreign company, as well as the losses of past years assessed by the tax authority, from the earnings of the current year of a controlled foreign company under Paragraph 2, Article 2 herein, and such business income shall be included in the individual’s basic income of the current year. However, if the aggregate of the income in a filing unit is less than NT$1,000,000, it shall be excluded from the basic income. 

The holding ratio of the individual in the preceding paragraph shall be calculated according to the actual holding of the shares or capital of the controlled foreign company and the holding periods based on weighted average. However, where the holding period is not found by the tax authority, the holding ratio shall be determined according to the actual holding of the shares or capital of the controlled foreign company on December 31 of the current year. 

Starting from the year when the controlled foreign company becomes eligible, the individual may deduct the loss of a previous year from the controlled foreign company's earnings of the current year, in every year for a period of ten years, as set forth in the first paragraph, provided that, however, the individual has provided the financial statements or other documents of the controlled foreign company pursuant to Paragraph 6 of the preceding Article, and has calculated the losses of the controlled foreign company pursuant to Paragraph 5 of the preceding Article, and has filled out the forms required, and such losses have been assessed by the tax authority at the domicile location of the individual. Where a controlled foreign company's earnings of the current year are exempt under Article 12-1 of the Income Basic Tax Act pursuant to Paragraph 1 of the preceding Article, or the business income calculated based on the direct holding ratio and holding period of the shares or capital of a controlled foreign company is excluded from the basic income in accordance with Paragraph 1, the assessed losses of the previous years of such controlled foreign company shall be deducted in sequential order from its earnings of the current year. 

Where a controlled foreign company files for capital reduction to make up its losses, the reduced capital amount and loss compensation amount shall be deducted from the assessed losses of previous years.
 Update:2018-06-04

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