Dear friends

The Taiwan Legislative Yuan passed Taxpayer Protection Act ("Act") on December 9, 2016 to enforce the protection of the right of existence, the right of work, and the right of property and other basic rights under the Constitution, to protect the right of the taxpayers, and to ensure the tax equity and the due process.  We summarize the Act below:

1. The lowest living index of the taxpayer and dependents shall satisfy the social human dignity and be exempted from taxation.  The "basic living index" shall be determined by the central competent authority at 60% of the median rate of the expenditure per person in the latest year, which will be reviewed every two years. (Article 4)

2. The tax collection authority shall determine the constituent elements of the taxation based on the actual economic facts and the economic benefits derived therefrom.  The tax collection authority may have the taxation claim right based on the legal form equivalent to the actual economic benefits and may impose 15% delinquency charge plus the interests accrued thereon. (Article 7)

3. The tax interpretation rulings of the competent authority shall be made public except for those involving official secrets, trade secrets and personal privacy. (Article 9)

4. In general, evidences illegally collected by the tax collection authority shall not be used as basis for taxation or sanctions. (Article 11)

5. A taxpayer under investigation shall have the right to appoint an agent or appear with the company of an assistant. (Article 12)

6. In respect of the taxation basis, the tax collection authority may determine the tax on assumption basis, tax payers who have performed assistance duties in accordance with tax laws shall not be sanctioned by the tax collection authority based on the assumed results. (Article 14)

7. A non-willful or non-negligent breach of duties under tax law is exempted from sanctions. A taxpayer cannot be excused from responsibility for administrative penalty due to the reason of his unawareness of law; provided that sanctions can be reduced or exempted based on facts. (Article 16)

8. To enhance the protection of taxpayer's right, it is stipulated that at least 2/3 of the members of an administrative appeal review committee shall be the respectable persons, scholars or experts, and shall be specialize in law, tax and accounting. (Article 17)

9. To improve the quality and efficiency of the tax-related administration litigations, both of the high and supreme administrative courts shall form tax specialized tribunals with the judges who have obtained certificates of tax cases specialization issued by the Judicial Yuan. (Article 18)

10. The competent authority shall set up the Consultation Committee for Protection of Taxpayer's Rights, which shall provide consultation for the basic policies of taxpayer protection.  The representatives of the government authorities shall not exceed 1/3. (Article 19)

11. The tax authority shall appoint taxpayer protection officials to offer appropriate and necessary assistance to taxpayers. (Article 20)

12. It is stipulated that the administrative courts shall conduct investigations, and determine the tax payable by the taxpayers.  Meanwhile, a taxation disposition、 reexamination or administrative appeal decision for the tax dispute shall not be enforced in general if the tax amount is not finalized within 15 years after the court has cancelled or changed the judgement. (Article 21)

Sue Su / Peter Huang