Taiwan’s National Taxation Bureau on November 11 stated that not all expenditures resulting from research and development (R&D) departments can be declared for tax credits even when companies are generally eligible for and approved to claim R&D tax credits.
Expenditures for equipment, materials, and supplies for R&D departments may only qualify for tax credits if they are exclusive to the R&D department and connected to the research records by purchasing order, the tax bureau notes.
It adds that certain types of expenditures are not allowed to be declared as R&D tax credits. These include expenses in connection with market testing, advertising, travel and meals, and insurance premiums. If claims are made for such expenses in income tax returns, the tax bureau will reject them and issue a tax bill in connection with the amount claimed.
The bureau recommends taxpayers familiarize themselves with the regulatory requirements before making R&D tax credit claims.
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