Profit-seeking enterprises CFC audit selection will soon begin.Please pay attention to the four main audit points.
The National Taxation Bureau of the Northern Area （NTBNA）, MOF, stated that it will soon conduct controlled foreign corporation（CFC）audits for the year 2023（ROC Year 112） on profit-seeking enterprise income tax filings within its jurisdiction. Profit-seeking enterprises are reminded to review their filing details, and if there are any cases of underreporting of CFC investment income, they should promptly amend and file payment of tax.
The Bureau further explains that the CFC audit selection process will focus on four main categories of cases:
1. Cases where profit-seeking enterprises and their related parties directly or indirectly holding 50% or more of shares or capital of a foreign enterprise registered in a low-tax jurisdiction, or having a significant influence on such a foreign enterprise, which meet the criteria for CFC but have not declared CFC investment income as required.
2. Cases where the profit-seeking enterprises declared CFC’s income under an exemption threshold, to verify whether the CFC carries out substantial operating activities and whether the current-year earnings of the CFC are under the exemption threshold.
3. Cases where the profit-seeking enterprises declared a loss of the CFC, to verify the accuracy of the loss calculations.
4. Cases where the profit-seeking enterprises declared CFC’s investment income, to verify the accurate calculation of the CFC’s annual earnings and investment income.
The Bureau would like to especially remind companies that, prior to being selected for an audit, if they have not declared or underreported CFC’s investment income as required, they should voluntarily declare and pay additional taxes to avoid penalties. If you have any questions, please visit the website of NTBNA（https://www.ntbna.gov.tw） to inquire about the relevant laws or call the toll-free service number 0800-000321 for detailed consultation services.
【Contact Person: Ms. Li, Head, Profit-seeking Enterprise Income Tax Division. Tel:（03）3396789, ext. 1350】
Reference URL：https://www.mof.gov.tw/Eng/singlehtml/f48d641f159a4866b1d31c0916fbcc71?cntId=0327035e7e524a2992f23b3b29cee676