When a profit-making enterprise files an annual income tax return, it should fill in the correct industry code according to the actual business items.

The Northern District National Taxation Bureau of the Ministry of Finance stated that when profit-making enterprises file income tax settlement returns, they should fill in the industry code according to the actual business items of the current year in order to apply the expanded audited net profit rate, income standard or same-industry profit standard of the correct industry.

The bureau further explained that profit-making businesses can go to the tax industry standard classification query system on the Ministry of Finance website ( https://www.mof.gov.tw/财务交易统计) to query the industry code, name and definition of the actual business items and confirm the applicable industry code to avoid filling in errors when filing settlement declarations.

The bureau gave an example, in which Company A's 2012 business income tax return stated that the applicable industry code was 4642-11 wholesale of electronic equipment and electronic devices, and the reported gross profit margin was 17.5%, which reached the industry's standard gross profit margin of 17%. However, the bureau found that Company A's actual business items for that year were the sale of wires and cables, and the applicable industry code should be 4649-20 wholesale of electrical equipment, with a standard gross profit margin of 19%. The company was unable to provide operating cost analysis data, resulting in the inability to cross-check costs. Therefore, the bureau determined the taxable income for 2012 based on the correct industry code and standard gross profit margin of 19%, and levied additional taxes of more than NT$1 million.

The bureau reminds that profit-making businesses should file income tax settlement returns according to actual business items and industry codes. If any errors are found in the declaration, please automatically report and pay the unpaid taxes and additional interest to the relevant national tax bureau as soon as possible. If you still have questions, please visit the bureau’s website ( https://www.ntbna.gov.tw ) to check relevant laws or call the toll-free service number 0800-000321 for inquiries. The bureau will wholeheartedly provide detailed consulting services.

Contact person for press release: Liu, Section Chief, Business Taxation Group Contact phone number: (03) 3396789 ext. 1330