According to the National Taxation Bureau of Taipei, Ministry of Finance, a taxpayer may provide immovable property as a security for tax payment in order to remove a prohibition on the disposal of property imposed by the taxing authority due to unpaid taxes. For the calculation of the security value of the immovable property, the taxpayer can actively provide the current price information and supporting documents of the price of housing and land assessed for a bank loan, and it shall be verified and confirmed by the taxing authority. Once full security of the tax payment has been confirmed, the registration of the prohibition on the disposal of property will be removed.
The Bureau explains that when a taxpayer provides land or housing with completed building ownership registration as security for tax payment, or when the taxing authority uses it as the subject of tax safeguards, the land is valued at 20% above the announced current land value, and the housing is valued at 20% above the current value of the housing as assessed by the taxing authority, as the principle of valuation. However, if the taxpayer takes the initiative to provide sufficient information and supporting documents to verify the current price of the land or housing, after the taxing authority has verified it to be true, it may be verified and confirmed.
For example, Mr. Lin, a taxpayer with overdue gift tax of NT$1 million, has two land parcels in his name, Land A and Land B. In order to safeguard his tax claim, the Bureau, based on the principle of valuation by adding 20% to the announced land current value of the aforementioned land, determines the value of the two immovable properties to be NT$400,000 for Land A and NT$800,000 for Land B, respectively. Therefore, within the scope of Mr. Lin's unpaid tax of NT$1 million, the Bureau notifies the land office to place a prohibition on the disposal of the partial ownership of Land A and Land B in Mr. Lin’s name, not to be transferred or with any other rights or encumbrances to be created on them. Subsequently, Mr. Lin wants to sell Land A and applies to use Land B as a security for tax payment to remove the prohibition on the disposal of Land A. With the Bureau's counseling, Mr. Lin provides the current price information and supporting documents of Land B’s price at NT$1,100,000 assessed by a bank loan. The Bureau verifies them to be true and assesses the value of Land B to be NT$1.1 million. As Mr. Lin has provided full security, the prohibition on the disposal of property on Land A is removed.
In particular, the Bureau reminds taxpayers using land or housing as a security for tax payment, if they think that the announced current land value or the assessed current value of the housing plus 20% does not match the value of the security, they are required to provide other supporting documents sufficient to prove the actual value of the immovable property, e.g., the price of immovable property assessed by a bank loan or the appraisal information of a real estate appraiser, for the taxing authority to verify and calculate the value of the security.
(Contact Person: Section Head Cai of the Collection Division. Telephone: 2311-3711 Ext. 2016)