According to two prior administrative rulings issued in 1997 and 1999 by the Ministry of Finance (MOF), foreign enterprises with fixed places of business in Taiwan, such as branch offices or project sites, were previously required to submit their head office’s financial reports audited by a certified public accountant (CPA), authenticated by a Republic of China (Taiwan) overseas consular office, when claiming offshore costs and expenses in their income tax filings.
However, the authentication procedures conducted by overseas consular office are often time-consuming and burdensome, thereby increasing the tax compliance costs borne by foreign enterprises. Therefore, on September 16, 2026, MOF issued Order No. Tai-Cai-Shui-Zi-11500617350, amending aforementioned two prior administrative rulings, to eliminate the requirement for overseas consular authentication.
Going forward, where a foreign enterprise engages in design, contracting, or other construction work within the territory of Taiwan and files its income tax return through its branch or construction site, or where its foreign head office directly provides services within the territory of Taiwan and its domestic branch files the income tax return, if costs and expenses incurred outside the territory of Taiwan are reported, such foreign enterprises need only present their head office’s financial reports audited by a qualified CPA in the jurisdiction of the head office, containing information on the calculation and allocation of offshore costs and expenses.
The MOF cited the following reasons for the amendment: (i) the consular authentication procedure was cumbersome; (ii) such authentication merely verified the formal validity of foreign documents; and (iii) CPA-audited financial reports are in practice sufficient for tax authorities’ review. The amendment aims to reduce tax compliance costs for foreign enterprises and foster a more investor-friendly tax environment.
Foreign enterprises engaged in design, contracting, other construction work , or service activities in Taiwan are advised to review and update their internal tax filing procedures accordingly.
