The focus of the design of the fiscal system is the distribution of national taxation, so that the central government and local governments can receive the necessary financial resources to support infrastructure. According to the ROC’s current Act Governing the Allocation of Government Revenues and Expenditures, tax is divided into national tax and directly governed municipality and county (city) tax. National tax belongs to the central government; the ten types of national taxes include income tax, estate tax, gift tax, customs duties, business tax (originally a local tax, changed to a national tax in 1999), commodity tax, tobacco and alcohol tax, securities transaction tax, futures transaction tax, and specifically selected goods and services tax.

The Fiscal Information Agency (FIA) of the Ministry of Finance is responsible for the digitalization of the individual income tax, profit-seeking enterprise income tax, business tax, estate and gift tax, securities transaction and futures transaction tax, commodity tax, tobacco and alcohol tax, and specifically selected goods and services tax.

1. Development of various tax systems

Individual Income Tax

The planning of the individual income tax system began the earliest among all tax systems in 1968 with the centralized registration and filing of withholding and exemption certificates, non-withholding information, and settlement returns. Later on, the operation of settlement return refunds, approved billing operations for returns and unreported returns, and approved correction billing operations were gradually incorporated into the operation system development and the establishment of an information operation environment.

From 1997 to 2001, the proportion of tax returns filed with 2D barcode increased significantly. With the development of the Internet in recent years, taxpayers can easily complete their tax returns and payments through the Internet, so that they do not have to wait in long lines at the inspection offices during tax filing.

For simple cases, a trial service for the pre-calculation of individual income tax returns was conducted between 2010 and 2011, and the service was officially launched online in May 2011.

The pre-calculation of the tax amount is done using the standard deduction amount for taxpayers with the collected information on deductible income, and the tax return is completed upon payment of tax to simplify the filing process.

In 2012, the mobile service for the pre-calculation of individual income tax settlement and filing was provided.

In 2013, tax payment via a current account was added, as well as the download service of the additional deduction amount for foreigners’ individual income tax, and the code of the electronic tax return database was changed to UTF-8.

In 2015, the online filing service provides the download of personal income/deduction information by inquiry code.

In 2016, the House and Land Transactions Income Tax system was added, and NHI card authentication service and web-based filing service (applicable to IOS and Android Tablet) were provided for online Individual Income Tax filing.

In 2017, the web version of online tax filing provides NHI card authentication service, and the foreigner filing section adds inquiry and filing using Citizen Digital Certificate.

In 2018, the design of the website was improved to enhance the service efficiency.

In 2020, the KIOSK printing code and TW FidO service was added.

In 2021, cell phone tax filing and mobile phone authentication services were added.

In 2023,attachment uploading services were added. Tax services continue to be improved upon to maximize the benefits of streamlining and convenience through electronic services.

Profit-seeking Enterprise Income Tax

Filing of Profit-seeking Enterprise Income Tax Return

Since 1975, the FIA has been responsible for the computerized operations of filing profit-seeking enterprise income tax returns. In 1987, the system was changed so that filings were conducted on-site at National Taxation Bureaus.

In 1993, the profit-seeking enterprise income tax return could be filed via electronic media.

In 2000, the profit-seeking enterprise income tax return internet declaration system was launched.

In 2001, the profit-seeking enterprise provisional income tax return internet declaration system was launched.

In 2004, the new function of printing all profit-seeking enterprises income tax return declaration forms through the internet declaration system and the function of tax agencies to upload declaration materials in batches were added.

In 2006, the financial chip card online tax payment mechanism was added to provide more convenient tax return services for taxpayers.

In 2007, according to the income basic tax return operation, the relevant system program functions were adjusted to meet the needs of the tax collection, and the spirit of Alternative Minimum Tax was implemented. The consolidated tax return declaration system was also launched in the same year.

In 2011, the income tax return internet declaration system for education, culture, public welfare or charity institutions or organizations was launched.

In 2013, tax payment by current deposit account transfer was added, and a current final report on total business income could be filed via electronic media.

In 2018, the profit-seeking enterprise income tax on cross-border electronic services platform was launched.

In 2019, the filing via Internet and attachment data uploading service of current final report on total business income and current final report on income earned from liquidation was launched.

In line with the international anti-tax avoidance trend, the Country-by-Country Report and Master File could be filed via Internet.

In 2020, the filing via Internet of investor and shareholder transfer notification was launched.

In 2021, the profit-seeking enterprise income tax return internet declaration system added the investment tax credit intermediary service with the “Smart Machinery or Fifth Generation Mobile Communication System Investment Tax Credit Declaration System” of the Industrial Development Bureau of the Ministry of Economic Affairs.

In 2021, the filing via Internet of business income tax for profit-seeking enterprise having no permanent establishment and business agent in R.O.C. was launched.

Enterprise income tax digitalized case selection

The digitalized case selection of enterprise income tax is a “case selection model system” that began in 1980, and a trial run was launched in National Taxation Bureau of Taipei, Ministry of Finance (aka Taipei National Taxation Bureau).

In 1985, the “Case Selection Model Amendment Research Group” was established as well as popularize deployment. Then the “Income Tax Computer Case Selection Model Project Research Project” was carried out in 1987.

The Department of Statistics of the Ministry of Finance was requested to assist in the study and analysis of the case selection model of the two discriminant functions of regression analysis in 1996.

The “Digitalized Case Selection Mode Amendment Task Force” was established again to review and revise the case selection mode in 2006.

In 2012, the tax restructuring project added a profit-making enterprise review auxiliary system, leveraging technology tools such as data warehousing, business intelligence, accounting projects, risk management, and knowledge management, to help auditors accumulate tax inspection knowledge and experience, increase tax revenue, and maintain tax fairness.

In order to elevate the utilization of tax data to accurately select cases, the Fiscal Information Agency, Ministry of Finance has added enterprise income tax digitalized case selection operations into taxation restructuring projects since 2015.

In response to the variety of business models, the restructuring project incorporated the “intelligent tax service planning and reconstruction outsourcing project” in 2020, with plans to introduce visual analysis and optimize system functions to improve the efficiency of enterprise income tax digitalized case selection.

In 2024, the MOF added a mechanism for credit card online tax payment to the profit-seeking enterprise income tax return internet declaration system, providing diversified and safe tax filing channels for taxpayers.

Business Tax

Business tax originally was a form of local tax, but it was restructured into national tax on July 1, 1999, and local tax collection agencies were entrusted to collect tax. Approved by the Executive Yuan, since January 1, 2003, business tax is collected by the National Taxation Bureau. In order to smoothly integrate business tax into the national tax information platform, the tax information transfer of the new platform operation was handled according to the “Electronic Operation Plan for the Self-collection of Business Tax by the National Taxation Bureaus of the Ministry of Finance” and officially came online on January 1, 2004. In conjunction with the Ministry of Finance to implement the new platform of the “Overall Implementation Plan for Taxation Information System Integration, Reengineering and Renewal” to build a smart business tax case selection system, the reengineering platform was launched in October 2012. In July 2018, in response to the adjustment of the national tax business organization of Fiscal Information Agency, the Business Tax Section was adjusted to E-Invoice Division.

To effectively attract foreign tourists to come to Taiwan for sightseeing and shopping, the Ministry of Transportation and Communications added Article 50-1 in the Act for the Development of Tourism. The article stipulates the tax refund system for the purchase of goods by foreign tourists, which was promulgated by the national government on June 11, 2003. The Ministry of Finance (MOF) began implementing the business tax refund mechanism for foreign tourists on October 1, 2003. As a result, the number of tax refunds for foreign tourists has increased year by year. To make the shopping tax refund system for foreign tourists easier and faster, and to enhance the efficiency of VAT refunding procedures and provide varied and convenient VAT refund methods, the MOF established the Foreign Tourists VAT Refund Project Team on September 23, 2014. In line with the international practice of outsourcing VAT with reference to the worldwide tax refund services, this new generation of information system was built, and private business entities were commissioned to operate this tax refund service starting on May 1, 2016.

In order to resolve issues of cross-border electronic services taxation and promote tax fairness, the amendments to the Value-added and Non-value-added Business Tax Act were announced by the President on December 28, 2016, and implemented on May 1, 2017. To align with the implementation schedule, the Ministry of Finance added the Tax on Cross-Border Electronic Services zone on the eTax Portal, as well as built related functions to provide convenient tax registration, declaration, and payment services for cross-border electronic services business entities. From January 1, 2019, the declaration function was moved to the e-Filling and Tax Payment Service platform to provide better declaration services, but Cross-Border Electronic Services zone on the eTax Portal, Ministry of Finance was still used as the single entry for tax services related to cross-border electronic services. In order to improve the support of Chinese code for domestic business entities declaring business tax via internet and electronic media, on December 4, 2018, the industry revised and released “The Operation Directions for Business Tax Declaration Electronic Data,” and changed the data encoding format of business tax media file from BIG5 code to UTF-8 code, effective from August 1, 2019, resolving the issue where rare Chinese characters could not be displayed on electronic declarations.

The Ministry affirmed that the Fiscal Information Agency, MOF has provided daily updated “Nationwide Business Taxation Registration” dataset including tax code number, business entity name, headquarters uniform number, business address, organization name, capital amount, date of establishment, industry code, and use of uniform invoices since 2004, which is accessible to use for integrating open data from each department and institution and making further value-added applications. On November 4, 2019, it won second prize in the “Government Open Data Popularity Award.”

In order to create added value of financial data, a business tax sampling database is to be built. The National Development Council, Directorate-General of Budget, Accounting and Statistics, Executive Yuan, R.O.C (DGBAS), Ministry of the Interior, Ministry of Economic Affairs, Ministry of Finance, and various scholars and experts were invited to hold a “Business Tax Sampling Database Planning and Construction Conference,” to understand needs and collect feedback from all walks of life, and complete the establishment of business tax sampling database. At the end of December 2021, it was placed in the financial and tax sampling database area of the Fiscal Information Agency website, to provide applications in various fields for policy analysis or academic research.

The dataset for School BANs, which includes tax code number, school name, and school location, was launched in 2008, and is accessible to use for integrating open data from each department and institution and making further value-added applications. On November 6, 2023, it won 10th prize in the “Government Open Data Popularity Award.”

Other National Taxes

Since 1984, the Ministry of Finance has centralized the filing of gift tax returns and death registration forms for estate and gift taxes. In 1991, the Ministry of Finance changed to a decentralized system of local filing and online investigation; in 1991, the Ministry of Finance started to use the automatic filing system to examine and approve the tax returns; in 1993, case transfer operations were added; in 1994, counter operations were added. Online filing operations were added in 2011, and agent online filing operations were added in 2016. In 2017, NHI card and financial certificate online filing operations were added. In 2018, the uploading of attachments for estate and gift tax was added, as well as the download of online filing property data for estate tax.

In 2019, the MOF began providing inter-office over-the-counter filing service for estate and gift tax. Since July 1, 2020, the “single-window inquiry measure for financial estates” has been implemented, through which the applicant will receive a reply from the inquiry agency after the taxpayer applies to the inspection authority. From September 1, 2021, taxpayers can apply to the tax authorities for financial estate information, and the taxation bureau will reply to them through a single contact. Starting from January 1, 2022, the “Pre-calculation Service for Estate Tax Return” has been provided, and taxpayers can apply for pre-calculation of their tax amount when applying for financial estate information.

In 1990, the Ministry of Finance established a special group to handle the planning of the securities transaction tax system, which was fully promoted in 1995; in 1999, the planning of the futures transaction tax system was completed and promoted to the local taxation bureaus. In 2011, online declaration operations were added.

Since 1983, the Ministry of Finance has centralized the processing of tax registration of goods tax manufacturers, product registration data, and monthly reports on the tax clearance of production, sales, and storage transferred by the audit authorities on a monthly basis, and established a project group planning system in 1990, which has been fully promoted since 2001. In the same year, in conjunction with the introduction of the tobacco and alcohol tax, the tobacco and alcohol tax group planning system was established, which was fully launched in the following year, adding online filing operations in 2011 and online tax filing operations in 2020.

In April 2011, the Ministry of Finance established a special goods and service tax project group planning system. The system was completed at the end of May, and it was fully launched in conjunction with the implementation of the “Special Goods and Service Tax Regulations” in June.

In 2016, in conjunction with the launch of the integrated housing and land tax, housing and land transactions were included in the integrated housing and land tax declaration process.

2. The evolution of information operation platforms

The above-mentioned tax information systems were developed separately starting in 1968, using three kinds of servers and almost 20,000 programs. The 33rd National Tax Meeting convened by the MOF in 1996 resolved to establish to establish a special task group to integrate the platform for information operations, streamline processes, and shorten processing time, and to conform with the information requirements of the Internet and database framework. The group comprised the FIA, Taxation Administration, and the five National Taxation Bureaus, and undertook planning of the project to transfer the platform for tax information operations, which was approved by the Executive Yuan in 1997. The outsourcing bidding process was completed in February 1999.

The software and hardware for the FIA and the five National Taxation Bureaus was set up in June 2000; after the application integration test was completed on February 22, 2001, the national tax system began formal operations with database management, high-speed connection, and comprehensive and secure digital maintenance.

To improve convenient services for the public, the Ministry of Finance initiated the “overall test for system efficiency” in January 2002, and continued to improve system programming. A total of 100 applications, 8,297 programs had been checked, over 1,400 tables were standardized, and the transfer of 10,504 historical media files and 1,784 tapes were completed by March 2002. The national tax information operation system now includes various tax application to provide cross-agency and cross-institution investigation, allowing many governmental agencies to share data files and the public to access tax services online.

The provision of real-time investigation services allowed agencies to take on cases at single contact windows and provide comprehensive processing. With the rise of information sharing, the Ministry of Finance rose to the challenges of the internet era to strictly prevent cybercrime. To enhance the information security of the tax system and prevent the disclosure of taxpayer information, the MOF completed the establishment of its security system in 2001, allowing the developers to retain the logs of the processes for checking on their computers without printing and saving function after a strict verification process.

The Ministry of Finance started promoting the restructuring and integration of the tax information systems and established a centralized green energy server room in 2000, seeking to consolidate information equipment spread out across various organizations to enhance efficiency and reduce the use of resources, thereby shortening search times and improving information quality. The integration of information equipment from the National Treasury Administration and the National Property Administration into the servers of the FIA achieved this goal, while saving the cost of management and maintenance for related organizations to make it a win-win for all.

Cross-organization services covers a multitude of central and local organizations, improving the cooperation between organizations by integrating and increasing cross-organization information, which increase overall quality and image for the government.

By enhancing the sampling of case selection and auditing, the system provides diversified case selection and integrated checking processes, which reduces operational complexity, allows tax auditors to speed up the checking process, and shares resources and risk detection information with others through inter-connectivity. Since cybersecurity issues grow with the rapid advance of digital technology, the strengthening of the MOF’s cybersecurity capabilities is now a major area of focus, along with the continued development of tax information operations and tax reform measures to improve public services.

3. The development of electronic tax filing is in line with the Executive Yuan’s promotion of its e-government policy to provide taxpayers with a variety of convenient filing channels. The Ministry of Finance has completed the planning of “Internet tax filing,” which was reported to the Executive Yuan for approval in October 1997, and the first phase of “Internet tax filing” was carried out in an overall outsourcing manner from 1997 to 2004.

To expand the scope and quality of services, the second phase of the operation (2005-2010) included the two-dimensional barcode filing method and the barcode tax payment method. In order to enhance the service quality and utilize the internet to provide diversified and more convenient and safe tax filing channels, the third phase (2011 to 2018) included estate tax, gift tax, securities transaction tax, futures transaction tax, goods tax, tobacco and alcohol tax, etc., and began operations in September 2011.

In May 2010, the “Electronic Deduction Slip for Comprehensive Income Tax” was launched, a new and convenient service for individuals, providing deductions for “insurance premiums,” “home loan interest,” and “tertiary education tuition.”
In May 2011, the scope of service was expanded to include “medical and maternity expenses,” “donations,” “mental and physical disabilities,” and “disaster losses.” In May 2020, information on “Special Deduction for Long-Term Care” was added as a reference for taxpayers to search and download for tax filing.

In line with the Executive Yuan’s “Service-oriented Smart Government Promotion Plan” and the application and integration of new information and communication technologies, the MOF will continue to promote the fourth phase of operations (2019 to 2023). The scope of services includes “Individual Housing and Land Transaction Income Tax,” “Business Tax Book Upload,” “Business Tax Overseas E-Reporting,” and “Business Tax Overseas E-Reporting,” etc., and expands the “Integrated Tax Electronic Settlement Reporting Service” and “Integrated Tax Amount Trial Service Online Registration and Recovery.” Multiple tax filing channels for smart mobile devices will be offered, and the upgrade provides a convenient operating environment for the collection and processing of electronic data for deductions.

Unit: Family, household, case

1,058,861

Case Selection Auditing

In order to improve audit efficiency, enhance data integration, and easily adopt smart applications, the tax review auxiliary systems for business tax, profit-seeking enterprise income tax, and individual income tax were launched between March 2022 to October 2023. To avoid tax evasion and maintain tax fairness, a taxpayer risk alert mechanism was built in these systems. This mechanism evaluates the tax evasion risk of taxpayers by applying integrated data from a cross-tax database to build indicators of all tracked risk events and case review module. To enhance knowledge sharing across departments and organizations and provide integrated information for all relevant systems, a cross-region centralized knowledge management system beyond regions was released, which increased administrative efficiency at the same time.

Since April 2013 until the end of 2017, the “Case Selection Audit Promotion Team,” which organized its sub-teams for business tax, enterprise income tax, individual income tax, and data processing, consisting of staff from the FIA, Taxation Administration, and National Taxation Bureaus, held annual subgroup and team meetings, conducted training sessions, established evaluation and reward measures, and held regular system review discussions. These efforts aimed to accumulate the experience of senior examiners from all National Taxation Bureaus, collect operational requirements for case selection systems, refine systems functions and facilitate case selection equality and performance. With the continuous accumulation of the database for risk events and diverse selecting conditions over time, auditors can set various conditions, threshold values, and computation methods by themselves.

With the rapid development of e-commerce, the storage capacity of the integrated data data warehouse and the performance of the national tax platform can no longer meet operational requirements. This led to the launch of the project of “Intelligent Tax Service Planning and Establishment Outsourcing Case” in July 2020. This project aimed to rebuild “the tax review auxiliary systems” and integrate the three selection systems for business tax, profit-seeking enterprise income tax, and individual income tax into a single system. Additionally, a data governance mechanism and an operational environment for data analysis, such as artificial intelligence and machine learning, were established to cultivate data analytic expertise in financial and taxation fields and strengthen the efficiency of taxation services and audits.