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Taxation Administration,Ministry of Finance,R.O.C.Law Source Retrieving System of Taxation Laws and Regulations

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Tax Related Laws & Regulations

Tax Act:
Enforcement Rules of the Income Tax Act
Article 31-1
Content:
The face value stated in Paragraph 1, Article 24-1 of the Act is determined by the following rules:
1. Where the coupon rate of government bonds, corporate bonds, and financial bonds obtained by a profit-seeking enterprise was appointed at a fixed rate, the face value shall be the present value computed by discounting at the effective rate. However, in the case that the aforementioned bonds were classified as financial assets of which the change in their fair value shall be recorded as gains or losses in accordance with the Regulations on Business Entity Accounting Handling or the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and which the premium or discount is not amortized at the effective rate, the face value shall be the par value. 
2. Where the coupon rate of government bonds, corporate bonds, and financial bonds obtained by a profit-seeking enterprise was appointed at a floating rate, the face value shall be the par value. 
The interest rate of bonds stated in Paragraph 1, Article 24-1 of the Act is determined by the following rules:
1. Where the coupon rate of government bonds, corporate bonds, and financial bonds obtained by a profit-seeking enterprise was appointed at a fixed rate, the interest rate shall be the effective rate at the time of acquisition; where each bond is acquired at different time while belongs to the same issuance period, the interest rate is the average effective rate at the time of acquisition. However, in the case that the aforementioned bonds were classified as financial assets of which the change in their fair value shall be recorded as gains or losses in accordance with the Regulations on Business Entity Accounting Handling or the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and which the premium or discount is not amortized at the effective rate, the interest rate shall be the coupon rate. 
2. Where the coupon rate of government bonds, corporate bonds, and financial bonds obtained by a profit-seeking enterprise was appointed at a floating rate, the interest rate shall be the coupon rate. 
The effective rate specified in the preceding two paragraphs refers to the rate used to discount future cash flows for the duration of the aforementioned bonds to derive their present value which is equal to the carrying value of the bonds on acquisition。
 Update:2018-04-20

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