background image
13.1. GAAR and General Anti-Avoidance Measures

Taiwan's tax law contains provisions to deal with tax evasion and avoidance using the substance over form principle. Under the rules, Taiwan tax authorities can ignore transactions that are deemed to be tax evasive or avoidant in nature and can assess taxes to each party in a transaction based on the substance of the transaction.

When evaluating a suspected case of tax evasion or avoidance, the Taiwan tax authorities will assess the elements and facts of taxation based on the existence of an actual economic relationship and related interests. During the evaluation, the taxpayers are required to assist in providing relevant information requested by the tax authorities, but the burden of proof is borne by the tax authorities.