Businesses Must Accurately Report Dividend Income for VAT, Says Tax Bureau

• Businesses receiving domestic and international dividend income must report it correctly for business tax purposes
• The Ministry of Finance’s Northern Region National Tax Bureau states that to simplify reporting, such dividends can be excluded from the tax-exempt sales amount during the year
• At the end of the year, all dividend income received is to be consolidated and reported with the last period’s tax-exempt sales to calculate the tax due or refund
• The calculation follows the “Method for Calculating Business Tax for Businesses with Multiple Sources of Income” which adjusts the tax amount based on a non-deductible ratio for the year
• Dividend income includes cash dividends and stock dividends from unallocated earnings but excludes stock dividends from capital reserves
• The bureau explains two methods for calculating the non-deductible ratio, the proportional deduction method and the direct deduction method, with details and considerations provided in an attached table
• Businesses are reminded to include all dividend income from the year in their last tax period’s report to avoid penalties for unadjusted tax filings
• For any queries, businesses can contact the free service number 0800-000321 for assistance and consultation from the bureau

Source: mof.gov.tw

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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