Penalty Provisions

In order to ensure the collection of taxes, the Government, in exercising its power to govern, shall impose sanctions according to the gravity of each case against any violation of obligations under the tax law Unless otherwise provided in relevant tax laws, the Tax Collection Law has the following important provisions regarding penalties:

A.

A taxpayer who has, by fraudulent or other illegitimate means, evaded taxation is liable to no more than five years in prison and up to NT$10,000,000 in fines.

B.

A tax collecting or withholding agent who has, by fraudulent or other illegitimate measures, failed to report, under-reported, under-collected, or failed to collect or withhold any tax, is liable to no more than five years in prison, penal servitude and/or up to NT$60,000 in fines. A collecting or withholding agent who has misappropriated any tax collected or withheld is liable to similar penalties．

C.

Whoever aids and abets in committing the crimes under A and B above shall face up to three years in prison and up to NT$1,000,000 in fines.
Where a tax official, an attorney, a certified public accountant, or any other legitimate agent commits an offense described in the preceding paragraph, the penalty to be imposed shall be increased by up to one-half (1/2).

D.

Where a profit-seeking enterprise fails to provide or obtain certificates to or from others or to keep certificates as required by the law, a fine in an amount equivalent to five percent (5%) of the total amount of the relevant certificates as verified and determined shall be imposed on such enterprise.

E.

Where a profit-seeking enterprise fails to maintain accounting books or record transactions as required by the prescribed regulations, it shall be imposed with a fine of no less than three thousand New Taiwan Dollars (NT$3,000) but no more than seven thousand and five hundred New Taiwan Dollars (NT$7,500), and shall, in addition thereto, maintain accounting books or record transactions as required by the prescribed regulations within one (1) month. Failure to maintain accounting books or to keep records within the given time limit shall cause the violator to be liable for a fine of no less than seven thousand and five hundred New Taiwan Dollars (NT$7,500) but no more than fifteen thousand New Taiwan Dollars (NT$15,000), and the violator shall maintain accounting books or to record transactions as required by the prescribed regulations within one (1) month. If the violator further fails to do so within the given time limit, it shall be ordered to suspend its business until the required accounting books are maintained or transactions are recorded in accordance with the prescribed regulations.

F.

A profit-seeking enterprise which refuses to be investigated by the investigator appointed by the tax collection authorities or by the Taxation Agency of the Ministry of Finance, or refuses to submit relevant information and documents required for making tax assessment shall be imposed with a fine of no less than three thousand New Taiwan Dollars (NT$3,000) but no more than thirty thousand New Taiwan Dollars (NT$30,000).

G.

Serious cases of tax evasion shall be dealt with in accordance with the provisions of relevant tax laws and the Ministry. of Finance may further suspend treatment to encourage the taxpayer in question. The above penalty rules do not cover the whole body of sanctions against default of tax obligations, particularly violations of behavioral obligations which are dealt with in separate tax laws. The administrative fines are acted on by the tax collection authorities. A taxpayer who, because of negligence or ignorance of tax laws, has underpaid or failed to pay any tax but has since reported and paid the tax retroactively of his own accord to the tax collection authority before he is prosecuted or subjected to investigation by an investigator appointed by the collection authority or the Ministry of Finance, shall be exempt from all punishment as provided in the various tax laws with regard to tax evasion and under-reporting.

H.

Normally, a taxpayer who violates the obligations of the tax laws is subject to penalty according to the current provisions of relevant tax law. However, if the penalty according to the current provisions of relevant tax laws is greater than a previous penalty applicable at the time of tax evasion, then the taxpayer is subject to the lesser penalty.