The National Taxation Bureau of the Southern Area, Ministry of Finance stated that, for projects contracted by profit-seeking enterprises, the profits and losses shall be calculated at the time of completion. As for determination of the completion date, it has been stipulated in the “Regulations Governing Assessment of Profit-seeking Enterprise Income Tax.” Therefore, the year in which the profit-seeking enterprise income tax return is filed shall not be chosen arbitrarily.
The Bureau explained that, according to Paragraph 4, Article 24 of the preceding Regulations, the completion of a project contracted by a profit-seeking enterprise refers to the actual completion. The actual completion date shall be determined on the date which the project is actually completed and delivered to the proprietor. If the above-mentioned date cannot be verified, in the case of a building construction project, the date of usage license issued by the competent authority shall prevail. As for a non-building construction project, the date shall depend on the date which the project is accepted by the proprietor.
The Bureau would like to remind profit-seeking enterprises with contracted projects, that they should, in accordance with these Regulations, obtain relevant and sufficient evidence according to the project type for the tax authority to verify the completion date, so as to avoid tax adjustments and imposition of additional tax due to an incorrect year in which the profit or loss is recognized.
Press Release Contact: Ms. Wang
Profit-seeking Enterprise Income Tax Division
TEL: 06-2223111 ext.8032