BUSINESS MERGERS AND ACQUISITIONS ACT Article 43
If provided with sound and complete accounting books and records, the loss and the year for the declaration of deduction as a result of the merger/consolidation by a company entitled to use the blue declaration form as referred to in Article 77 of the Income Tax Act or if provided with a CPA certified report and the income tax has been declared and paid up within the given time, the surviving company or the newly incorporated company after the merger/consolidation in declaring the final income tax of profit business may deduct from the net profit of the current year within ten years upon the year the loss takes place the losses provided under Article 39 of the Income Tax Act before the merger/consolidation for deduction to each company participating in the merger/consolidation in pro rata of the equities of the surviving company or the newly incorporated company held by each corporate shareholder due to the merger/consolidation.In case of a merger/consolidation by a domestic company with a foreign company, the surviving company or the newly incorporated company or the subsidiary company incorporated by the foreign company within the territory of the Republic of China may deduct any loss not yet deducted before the merger/consolidation by each company participating in the merger/consolidation or by the subsidiary company incorporated by the foreign company within the territory of the Republic of China.Upon the division of the company, the surviving company or the newly incorporated company may, as specified in Paragraph 1 of this Article, deduct from the net profit of the loss pending deduction before the division by each company participating in the division at the amount calculated pro rata according to the division of equity. Upon calculating of the deductible loss by the surviving company, the ratio of equity of the surviving company held after the division by the shareholders of each company participating in the division shall be further accounted for the calculation.
中文原文 企業併購法第43條
公司合併，其虧損及申報扣除年度，會計帳冊簿據完備，均使用所得稅法第七十七條所稱之藍色申報書或經會計師查核簽證，且如期辦理申報並繳納所得稅額者，合併後存續或新設公司於辦理營利事業所得稅結算申報時，得將各該參與合併之公司於合併前，依所得稅法第三十九條規定得扣除各期虧損，按各該公司股東因合併而持有合併後存續或新設公司股權之比例計算之金額，自虧損發生年度起十年內從當年度純益額中扣除。
公司與外國公司合併者，合併後存續或新設之公司或外國公司在中華民國境內設立之分公司，得依前項規定扣除各參與合併之公司或外國公司在中華民國境內設立之分公司合併前尚未扣除之虧損額。
公司分割時，既存或新設公司，得依第一項規定，將各參與分割公司分割前尚未扣除之虧損，按股權分割比例計算之金額，自其純益額中扣除。
既存公司於計算可扣除之虧損時，應再按各參與分割公司之股東分割後持有既存公司之股權之比例計算之。
公司與外國公司合併者，合併後存續或新設之公司或外國公司在中華民國境內設立之分公司，得依前項規定扣除各參與合併之公司或外國公司在中華民國境內設立之分公司合併前尚未扣除之虧損額。
公司分割時，既存或新設公司，得依第一項規定，將各參與分割公司分割前尚未扣除之虧損，按股權分割比例計算之金額，自其純益額中扣除。
既存公司於計算可扣除之虧損時，應再按各參與分割公司之股東分割後持有既存公司之股權之比例計算之。