Advantages and timing to engage “Undistributed Earnings Surcharge Tax Return” assessed and certified by CPA

For tax-saving purposes, the undistributed earnings of the year can be deducted from the loss of the next year when there is a Financial Audit Report.  

After an investigation by the tax authorities, the amount of tax evaded less than NT$20,000 is exempted from the penalty. 

Example: 
When filing the 2021 Profit-seeking Enterprises Income Tax Return and 2020 Undistributed Earnings Surcharge Tax Return, if the amount of 2020 undistributed earnings is positive and there is a loss in 2021 financial statements (after financial audit), the loss in 2021 can be deducted to 2020 undistributed earnings. The taxable amount of 2020 undistributed earnings can be deducted to ZERO at most.