Income Tax Act Article 3-4

With regard to the revenue, if any, derived from trust property, the trustee shall, in the year of derivation of such revenue and after deducting there-from the costs, necessary expenses and loss occurred, calculate the amount of each category of income as classified in this Act to be payable to each trust beneficiary; and each beneficiary shall include such portion of trust benefit distributed to him/her/it in his/her/its annual income tax return to be filed in the then current year for assessment of income tax under this Act.Where there are two or more beneficiaries entitled to the trust benefit set forth in the preceding Paragraph, the trustee shall calculate the amounts of such revenue distributable to all beneficiaries in accordance with the benefit distribution proportions explicitly provided in the trust deed or the deduced proportions. However, if the distribution proportions are unknown or can not be deduced, then the revenue of various categories of such revenue derived from the trust property and distributable to trust beneficiaries shall be calculated on an average basis.In the absence of specific or any beneficiary/beneficiaries, the tax payer for the amount of revenue derived from the trust property as calculated in the year of occurrence of such revenue under the preceding two Paragraphs shall be the trustee of the trust deed, and a withholding tax shall be paid at the applicable withholding rates and declared in the annual income tax return to be filed within the filing period stipulated in Article 71 of this Act. As for the withholding tax already declared and paid in accordance with the provisions of Paragraph 2, Article 89-1 of this Act, the amount of such withholding tax may be deducted from the amount of income tax payable by the tax payer. The withholding tax rates shall be formulated by the MOF and submitted to the Executive Yuan for its approval.In case a trustee fails to comply with the provisions set out in the preceding Paragraphs 1 through 3, the tax authority shall assess the amount of income of the trust beneficiary concerned based on the relevant information available and levy the income tax accordingly.With regard to the charitable trust conforming to the requirements set out in Article 4-3 of this Act, the trust benefits actually distributed to trust beneficiaries shall be included in their respective annual income for the year of such distribution for assessment of tax under this Act.With regard to the mutual trust funds, securities investment trust funds, futures trust funds and/or other trust funds approved by the Financial Supervisory Commission, Executive Yuan under the acts, the trust benefits actually distributed to trust beneficiaries shall be included in their respective annual income for the year of such distribution for assessment of tax under this Act.