If a dual-status business entity has no records of past due business tax payments and/or fines which have been confirmed, and has complete bookkeeping records that clearly identify the actual uses of goods or services bought or imported, it may apply to the competent authority for permission to use the direct deduction method for computing input tax that may be deducted from output tax and computing tax due for purchased services as specified in Paragraph 1, Article 36 of the Act based on the actual use of goods or services bought. Once the competent authority approves of the application, the dual-status business entity shall not apply to change the method in the next three years. 
If a dual-status business entity has been approved to use the direct deduction method for computing business tax during a year, the tax period in the year immediately prior to the initiation of the direct deduction method shall be treated as the last filing period of the year, in which tax adjustment shall be made according to Paragraphs 1 & 2 of Article 7 herein.