A resolution was adopted on September 12, 2017 during the First Joint Session of Presiding Judges of the Supreme Administrative Court for September 2017 (hereinafter, the “Resolution”) to stipulate that the period for the filing of inheritance taxes shall commence on the day when a civil decision which confirms the heritage of the interitee is rendered.
In response to the opinion that “it was not until the death of the inheritee that the court decided that the land belonged to the inheritee; and, therefore, the taxpayer of the inheritance tax shall supplement the filing of the inheritance tax within six months after the day the final decision was rendered and the tax period shall commence in accordance with Article 22 of the Tax Collection Law” as conveyed in the Tai-Cai-Shui-78034700 Circular of February 1, 1990 from the Ministry of Finance (hereinafter, the “MOF’s February 1, 1990 Circular”), this Resolution was adopted to determine if such opinion contradicted the legal opinion reflected in Article 23, Paragraph 1 of the Inheritance and Gift Tax Law and Article 22 of the Tax Collection Law. It was concluded in the Resolution that there was no contradiction.
According to the reasons set forth in this Resolution, the filing period under Article 23, Paragraph 1 of the Inheritance and Gift Tax Law and that under Article 22 of the Tax Collection Law should be preconditioned by the reasonable expectation that the taxpayer will perform the filing obligation and that the tax agency may exercise the tax levy right based on the principle of interpretation of constitutionality in order to meet their legislative objectives and reflect the nature of inheritance tax filing and tax levy matter. Therefore, if a taxpayer is yet to confirm through a final civil decision whether a land registered in the name of another person and the claim to its transfer registration are heritages of the inheritee, it is certainly difficult to expect the taxpayer to file the inheritance tax on property subject to existing disputes and is harder still to expect that the tax agency will exercise the tax levy right pursuant to law with the knowledge that such disputed property is a heritage. Therefore, with respect to such disputed property, the filing period for inheritance taxes under Article 23, Paragraph 1 of the Inheritance and Gift Tax Law shall commence on the day when a final civil decision confirms the heritage of the inheritee, and the tax period shall commence pursuant to Article 22 of the Tax Collection Law to balance the interest of the tax collecting and paying parties and to comply with the principles of substantive taxation and fair taxation.
It was further held in the Resolution that the MOF’s February 1, 1990 Circular contains an interpretation based on the principle of expectable possibility without adding any tax obligation not stipulated by law, does not violate the principle of taxation by law, and does not contravene Article 23, Paragraph 1 of the Inheritance and Tax Law and Article 22 of the Tax Collection Law.