Taiwan tax agency says it will not approve interest deductions for “unnecessary” loans

Taiwan’s Ministry of Finance, on January 30, advised that deductions or losses from a profit-seeking enterprises’ interest expenditures will be restricted to amounts that are reasonable and necessary, and that loans are not necessary if the company has enough money to operate.

“The necessary interest expenditure of business refers to it arising from borrowing funds from the third party when current funds are not enough to meet business operation.

“For instance, if there is still balance sufficient to operation, the loan is unnecessary, and the interest expenditure on the debts shall not be considered as expenses or losses,” the tax agency said in a release.

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