The National Taxation Bureau of Taipei, Ministry of Finance, stated that where a profit-seeking enterprise purchases goods meeting the requirements of Article 11-1, Article 12-5, or Article 12-6 of the Commodity Tax Act and, in accordance with the relevant provisions, obtains a refund of the reduced commodity tax, such refund constitutes a reduction in the cost or expense of purchasing the goods. The refund shall therefore be recorded as a deduction from the cost of the fixed asset, or from the expense recognized in the current year, as applicable.
The Bureau further pointed out that if a profit-seeking enterprise applies for the refund of the reduced commodity tax in the year following the year of purchase, the refund shall, at the time of application, be recorded as a deduction from the undepreciated balance of the asset. Pursuant to Article 52 of the Income Tax Act, depreciation shall continue to be calculated— over the remaining service life — based on the book value after deducting the refund. If the goods were originally recorded as an expense rather than as a fixed asset, the refund shall instead be recognized as other income for the year in which the application is filed. The treatment described above is summarized in the table below:
| Item | Year Refund Application Is Filed | |
| Refund Applied in Purchase Year | Refund Applied in the Following Year | |
| Originally Recorded as “Fixed Asset” | Recorded as a deduction from “Cost” | Recorded as a deduction from “Undepreciated Balance” |
| Originally Recorded as “Expense” | Recorded as a deduction from “Expense” | Recorded as “Other Income” |
The Bureau provided the following example in which Company A purchased a commercial air conditioner for business use on October 1, 2025, for NT$65,000 and recorded the purchase as an expense pursuant to Article 77-1 of the Regulations Governing the Assessment of Profit-Seeking Enterprise Income Tax. If Company A applies for a refund of NT$2,000 in reduced commodity tax on or before December 31 of the same year, the NT$2,000 refund shall be recorded as a deduction from that year’s expense. If Company A instead applies for the refund of the reduced commodity tax on or after January 1 of the following year (i.e., 2026), the refund shall be recognized as other income for the year in which the application is filed (i.e., 2026).
The Bureau reminds profit-seeking enterprises that, when applying for a refund of reduced commodity tax under the Commodity Tax Act, they should pay close attention to the proper tax treatment of the refund and the timing of its recognition, and should file accurate profit-seeking enterprise income tax returns in order to avoid any adverse effect on their own rights and interests.
(Contact: Ms. Wu, Head of Legal Affairs Division; Tel: 02-23113711 ext. 2011)