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14.5. Interest and Penalties

Late Tax Payment

Late tax payments are subject to a 1% non-deductible surcharge for every 2 days the payment is late, up to 30 days. If the payment is late for more than 30 days, statutory non-deductible surcharge will be applied for each day the payment is late. The rate of the statutory surcharge is based on the one-year time deposit interest rate set by the Directorate General of the Postal Remittances & Savings Bank of Taiwan each year.

Late Filing of Tax Return

If a taxpayer fails to file a tax return by the deadline, a notice requesting the tax return will be issued by the tax authorities. If the return is filed within 15 days of the notice, a 10% surcharge will be assessed on taxes due (capped at TWD 30,000). If the return is filed after 15 days, a 20% surcharge will be assessed on the taxes due (capped at TWD 90,000).

Tax returns must be filed in paper using forms prescribed by the Taiwan tax authorities. No extensions for filing will be made and any delay in filing or returns can result in fines, and interest on late tax payments.

Incorrect Tax Return

Submission of an incorrect or fraudulent tax return can result in a fine of up to 200% of any additionally assessed tax.

In cases of tax evasion resulting in criminal prosecution, serious violation can result in fines of up to TWD 60,000 and/or imprisonment for up to 5 years.

Failure to Provide Requested Documentation

If an enterprise fails to provide requested documentation within the specified timeframe, or fails to provide documentation at all, a fine of between TWD 3,000 to TWD 30,000 may be imposed.