Income Tax Act Article 24

The amount of income of a profit-seeking enterprise shall be the net income, i.e., the gross yearly income after deduction of all costs, expenses, losses and taxes. When calculating the amount of income in which there are taxable and exempt incomes involved, the costs, expenses or losses, except for those which are attributable to such respective income in a direct, reasonable and definite way, which may be attributed to thereby and recognized as deductions respectively, shall be reasonably allocated to the respective income. Measures regarding such allocation shall be prescribed by the MOF.The accounts, expenses, losses, or various debts recorded in a profit-seeking enterprise's accounts that are payable but yet to be paid at the time of the expiry of the statute of limitations shall be enumerated under “other revenue” headings, and shall be enumerated under “non-operating expenditure” headings at the time of actual payment.Income derived from interest of short-term commercial papers by a profit-seeking enterprise in accordance with Category 4, Paragraph 1 of Article 14 shall not be added to the amount of income of the profit-seeking enterprise, but withheld in accordance with Article 88. However, where the issuing date of short-term commercial papers held by a profit-seeking enterprise is a day on or after January 1, 2010, the interest income of such short-term commercial papers shall be added to the amount of income of the profit-seeking enterprise.Beginning January 1, 2010, interest distributed from beneficiary securities or asset-backed securities issued in accordance with the Financial Asset Securitization Act or the Real Estate Securitization Act by a profit-seeking enterprise shall be added to the amount of income of the profit-seeking enterprise, and excluded from the application of Paragraph 2, Article 41 of the Financial Asset Securitization Act and Paragraph 3, Article 50 of the Real Estate Securitization Act regarding separate taxation.The dividends or earnings received by a profit-seeking enterprise having its head office outside the territory of the Republic of China shall not be added to the amount of income of the profit-seeking enterprise, but withheld in accordance with Article 88.