The tax regulations also state that transactions include any transactions, actions or plans, regardless of whether these transaction actions or plans are subject to legal procedures and must be enforced.
In order to obtain tax benefits, taxpayers will enter into or implement certain tax avoidance transactions. The Inland Revenue Department believes that the interests of the taxpayer must be balanced, so it will apply Article 61A of the Tax Regulations to assess the taxpayer’s legal liability for tax payment, and assume that part or all of the taxpayer’s transaction has never occurred. Appropriate tax assessments are made to withdraw the tax benefits obtained therefrom.
The tax regulations have the following definitions for tax benefits:
• Decrease their assessed income or increase deductions for expenditures to reduce taxes
• Arranged transactions can eventually evade tax liability
• Arranged transactions can eventually postpone tax liability until one year or even several years later
The above information is for reference only. If in doubt, we welcome your tax inquiries