Private institutions shall not be eligible to apply for the exemption from profit-seeking enterprise income tax prescribed in Article 36 of the Act if one of the following conditions applies:
1.　The income derived from operating a major infrastructure project has enjoyed an exemption from profit-seeking enterprise income tax according to other regulations.
2.　The private institution fails to file the income tax return according to Article 71 of the Income Tax Act.
3.　The private institution which omitted or under-reported the income on the filings of annual income tax returns, current final reports on total business income or income earned from liquidation has been punished in accordance with the provisions of Article 110 of the Income Tax Act during the tax exemption period. However, this shall not apply to cases where the amount of the income omitted or under-reported calculated at the profit-seeking enterprise income tax rate applicable in the current year does not exceed NT$200,000, or the ratio of the amount of income omitted and under-reported to the annual total income does not exceed 10%.
In the case where the amount of the annual total income of a private institution is filed as zero or negative in the profit-seeking enterprise income tax return of such institution, the stipulation specified in Subparagraph 3 of the preceding paragraph to calculate the ratio of the amount of income omitted and under-reported to annual total income shall not apply.