To simplify tax collection procedures and make tax filing easier for small and medium-sized enterprises (SMEs), the Ministry of Finance (MOF) has issued “Directions on the Implementation of Expanded Paper Review for Profit-Seeking Enterprise Income Tax Returns in the 2012 Tax Year.” Under these new directions, seven new categories of business enterprise, including greening services, power cable installation and repair, and pet grooming, have been brought within the scope of enterprises for which paper review of tax returns can be used. Starting this year, the businesses concerned can file tax declarations in accordance with the standard net profit margins for paper review.
The categories of enterprise newly included in paper review in 2012, and the standard net profit margins applied to them, are: other crop cultivation and greenery services, with a net profit margin of 4%; power cable installation and repair services, and automatic door installation and repair services, with a net profit margin of 7%; food sanitation testing services that have gross business income of under NT$10 million in a year, with a net profit margin of 10%; pet grooming and boarding services, with a net profit margin of 10%; and program arrangement and acting agencies, with a net profit margin of 6%.
The MOF said that, when an enterprise has net operating and non-operating income amounting to less than NT$30 million for the whole year, then provided it files its tax returns correctly and completely, if its net profit after adjustment according to law is higher than the standard net profit margin for its respective industry as set down by the MOF, and it pays its tax liability in full, it can have its business income tax liability assessed according to the lower standard net profit margin for paper review.
The MOF pointed out that, in the case of any retail enterprise using cash tills to issue uniform receipts, if it keeps account books according to law, and has not omitted any receipts or failed to declare any income for the year in question, it can further reduce its applicable net profit margin by one percentage point, as a measure to encourage businesses to report their taxable income honestly.