March 2019
Pursuant to an MOF directive, a consumers cooperative’s income incurred from sales to a non-member is subject to profit-seeking enterprise income tax (Taiwan)
2019.1.30
Fang-Wei Lin
The Tai-Cai-Shui-10700651310 Directive of January 30, 2019 (hereinafter, the "Directive") issued by Ministry of Finance (hereinafter, the "MOF") points out that when a consumers cooperative engages in consumer business pursuant to Article 3 of the Cooperatives Law, the income incurred from sales to a non-member shall be subject to profit-seeking enterprise income tax.
First, as pointed out in this Directive, when a consumers cooperative operates consumer business pursuant to Article 3 of the Cooperatives Law with business activities used by non-members under the proviso of Paragraph 2 and Paragraph 3 of Article 3-1 of the same law, and calculates its income incurred from the sales to its members and non-members pursuant to the last part of Article 24, Paragraph 1 of the Income Tax Law, the income incurred from sales to its members may be exempt from income tax pursuant to Article 4, Paragraph 1, Subparagraph 14 of the Income Tax Law; the income incurred from sales to its non-member shall still be subject to profit-seeking enterprise income tax pursuant to the Income Tax Law.
This Directive further points out that if the consumer business operated by a consumers cooperative is made available to non-members in violation of the proviso of Paragraph 2 and Paragraph 3 of Article 3-1 of the Cooperatives Law, or if the amount of such income cannot be calculated pursuant to the last part of Article 24, Paragraph 1 of the Income Tax Law, the entire income for the entire year shall be subject to profit-seeking income tax pursuant to the Income Tax Law.
Fang-Wei Lin
The Tai-Cai-Shui-10700651310 Directive of January 30, 2019 (hereinafter, the "Directive") issued by Ministry of Finance (hereinafter, the "MOF") points out that when a consumers cooperative engages in consumer business pursuant to Article 3 of the Cooperatives Law, the income incurred from sales to a non-member shall be subject to profit-seeking enterprise income tax.
First, as pointed out in this Directive, when a consumers cooperative operates consumer business pursuant to Article 3 of the Cooperatives Law with business activities used by non-members under the proviso of Paragraph 2 and Paragraph 3 of Article 3-1 of the same law, and calculates its income incurred from the sales to its members and non-members pursuant to the last part of Article 24, Paragraph 1 of the Income Tax Law, the income incurred from sales to its members may be exempt from income tax pursuant to Article 4, Paragraph 1, Subparagraph 14 of the Income Tax Law; the income incurred from sales to its non-member shall still be subject to profit-seeking enterprise income tax pursuant to the Income Tax Law.
This Directive further points out that if the consumer business operated by a consumers cooperative is made available to non-members in violation of the proviso of Paragraph 2 and Paragraph 3 of Article 3-1 of the Cooperatives Law, or if the amount of such income cannot be calculated pursuant to the last part of Article 24, Paragraph 1 of the Income Tax Law, the entire income for the entire year shall be subject to profit-seeking income tax pursuant to the Income Tax Law.
