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10. Tax Computation, Adjustments, and Collection

a. Basic Rule of Determination and Adjustment

(1)   As a rule, when a domestic corporation fails to file a return, the government

determines the tax base and the amount of corporation tax payable on the income of the

corporation for each business year.

(2)   Where the government determines or corrects the tax base and tax amount payable

of a corporation, the base and tax amount have to be determined based on the business

records and other relevant documents maintained by the corporation.

b. Determination and Adjustment of Tax Base and Tax Due

(1) When the tax return that a domestic corporation has filed falls within one of the

following categories below, the government may correct its tax base and the tax due.

(a) When there are any errors or omissions in the return filed

(b) When the company fails to submit payment statements or an aggregate summary

of accounting statements or an aggregate summary of tax invoices classified by sale

place and purchase place.

(2) Determination of the tax base and amount by estimation

Where the government is unable to calculate the tax base and tax amount because

of a failure to keep sufficient or reliable accounting records, the tax base and amount

of corporation tax are determined according to the standard income rate or in line

with other corporations in the same line of business.

(3) Determination by estimation may take place in the following cases:

(a)  accounting records required for calculation of the tax liability are  insufficient or false;

(b) the contents of accounting records are explicitly false in consideration of the

facilities, number of employees, and the prevailing market prices of raw materials,

merchandise, products, or various charges and rates;

(c) the contents of accounting records are explicitly false in consideration of the

quantities of raw materials used, electric power used, and other operating indicators.

c. Occasional Assessment

(1)    If tax evasion by a company is suspected, the government may occasionally

assess corporation tax. In particular, the occasional tax assessment may take place if:

(a) the corporation has moved its head office or its main office without filing a report;

(b) the company's business operation is suspended or is terminated; or

(c) where there is sufficient reason to determine that the corporation intends to avoid

or evade taxes.

(2)   The government assesses corporation tax by examining the period from the

beginning date of the business year to the date of discovery of circumstances, which led

to the occasional assessment.

d. Notice of Tax Base and Tax Amount

(1)   Where the government has determined or corrected the tax base and tax amount on

the income of a corporation for each business year, it shall notify the statement of tax

base and tax amount and other relevant statements to the respective corporations.

(2)   Where the government has determined or corrected the tax base of a corporation

whose location is unclear, it shall serve a public notice thereon.

e. Collection

(1)   Where a corporation has failed to pay the amount of corporation tax payable for

each business year, in full or in part, the government will collect the unpaid corporation

tax within two months from the end of the payment period. In the case of unpaid tax for an

interim prepayment period, it will collect the unpaid tax amount within two months

therefrom.

(2)   Where there are amounts of corporation tax payable as a result of an adjustment or

a determination of the tax, the government will collect the tax amount according to the

procedures prescribed in the National Tax Collection Law.

(3)   Where a tax withholding agent has failed either to collect the amount of tax due or to

pay the amount of tax collected within the payment period, the government will collect

from the tax withholding agent, the collectible amount as corporation tax according to the

procedures prescribed in the National Tax Collection Law without delay.