Go to Content Area :::

Decisions

Home > Decisions > Docket Search > Before 2022
:::
:::
  • Interpretation
  • No.327
  • Date
  • 1993/10/08
  • Issue
    • Does the intent of the first sentence of Item 2, Article 114, of the Income Tax Act provide for excessive fines and does it therefore contradict the Constitution?
  • Holding
    •        The first sentence of Item 2, Article 114, of the Income Tax Act provides that, for a tax withholder who has withheld and paid taxes in accordance with this Act but failed to submit or issue the tax-withholding certificates within the time limit prescribed in Article 92, the tax withholder shall, in addition to being requested to submit or issue the same within the time limit ordered by the authority, be fined at the rate of twenty per cent of the tax amount to be withheld.  The amount of the fine, however, shall not be less than NT$ 1,500.  If the certificate is submitted or issued after the deadline as a result of the tax withholder’s own initiative, the fine shall be reduced by fifty per cent.  The purposes of the aforesaid provision are to obtain the relevant tax source information and to preserve fair taxation.  The imposition of a fine upon the tax withholder for his/her noncompliance with the duties is necessary to protect the public interest, and such provision does not contradict the Constitution.  However, the authority-in-charge shall review and revise the provision under which the tax withholder would be fined at a fixed rate of the tax amount to be withheld without reasonable ceiling even though the tax withholder has paid the withholding tax within the prescribed time limit but only failed to submit or issue the tax-withholding certificates within the prescribed time limit.
      
  • Reasoning
    •        The first sentence of Item 2, Article 114, of the Income Tax Act provides that, for a tax withholder who has withheld and paid taxes in accordance with this Act but failed to submit or issue the tax-withholding certificates within the time limit prescribed in Article 92, the tax withholder shall, in addition to being requested to submit or issue the same within the time limits ordered by the authority, be fined at the rate of twenty per cent of the tax amount to be withheld.  The amount of the fine, however, shall not be less than NT$ 1,500.  If the certificate is submitted or issued after the deadline as a result of the tax withholder’s own initiative, the fine shall be reduced by fifty per cent.  The provision is to punish the tax withholder for his/her noncompliance with the submitting or issuing requirements within the prescribed time limit.  The purpose of imposing sanctions upon the non-compliant is to maintain the tax withholding system by compelling the tax withholder to perform his/her obligations.  Such provision is necessary for the authority-in-charge to obtain the relevant tax source information, to preserve fair taxation, and to ensure revenue for the Treasury, rather than to place unnecessary burden upon the tax withholder.  In this regard, the imposition of fine upon the tax withholder for his/her noncompliance with the duties is necessary to protect the public interest, and such provision does not contradict the Constitution.  However, the authority-in-charge shall, in order to prevent the imposition of excessive punishment, review and revise the provision under which the tax withholder should be fined at a fixed rate of the tax amount to be withheld without reasonable ceiling even though the tax withholder has paid the withholding tax within the prescribed time limit but only failed to submit or issue the tax-withholding certificates within the prescribed time limit.
      
    • *Translated by Chun-yih Cheng, Attorney at Law & Assistant Professor of Law.
Back Top