background image
Taiwan — Orbitax Country Chapters
14.1. Books and Records

According to Taiwan law, a profit-seeking enterprise must keep sufficient and accurate account books, vouchers and accounting records in order to accurately calculate its taxable income. Enterprises are required to maintain accounting records and prepare annual financial statements in accordance with Taiwan GAAP, which closely follows International Financial Reporting Standards. When an enterprise uses a computerized accounting system, it can be considered as accounting records.

The records an enterprise must keep include the following:

  • Complete accounting books, including:
    • Journals
    • General ledger
    • Subsidiary ledgers
    • Memorandum records
  • Vouchers, invoices, receipts
  • Complete financial statements, including:
    • Balance sheet
    • Income statement
    • Cash flow statement
    • Statement of changes in equity
    • Explanatory notes with comparative data of the previous year

All accounting documents, books and statements prepared must be written in Chinese. However, they may also be written concurrently in a foreign language. The accounting books must also be denominated in New Taiwan Dollars (TWD). If accounts are kept in another currency, they must be converted to TWD in closing financial statements.

In general, the accrual basis should be used for the accounting system. Income realized and expenses incurred in the current period must be recognized in the current period, regardless if received or paid.

However, in certain cases accounting done on a cash basis may be allowed. Such cases include when a business is not organized as a company, if using cash basis is an established custom of the business, or if the volume of business small.

Accounting records must be kept for a minimum of 5 years, and accounting books for a minimum of 10 years after completion of annual closing.