On 30 September 2026, the National Taxation Bureau of the Northern Area announced a landmark enforcement action against a taxpayer who failed to declare house and land transaction income tax arising from the assignment of a pre-sale property contract. The seller, Mr. Chen, transferred his contractual position in a pre-sale apartment in New Taipei City for a profit of NT$8.5 million in 2024 but omitted the gain from his annual income tax return. The tax authority discovered the transaction through data matching with the Land Registration Office and the pre-sale registration system maintained by the Construction and Planning Agency. Under the Income Tax Act, gains from assignment of pre-sale contracts are treated as “house and land transaction income” subject to a separate flat tax rate of 10% (for holdings over 10 years) or 15% (for holdings under 10 years), plus a 2.5% surtax for non-self-use properties.
Key Takeaways
- Deemed Realization Upon Contract Assignment: The ruling clarifies that the transfer of a pre-sale purchase contract constitutes a taxable disposition of land rights, triggering immediate tax liability on the difference between the assignment price and the original contract price, regardless of whether the building has been completed or title registered.
- Enhanced Data-Driven Audit Capability: The tax bureau leveraged the newly integrated “Real Estate Transaction Intelligence Platform” which cross-references pre-sale registration, land ownership, building permits, and actual transaction prices reported by both parties. The system flagged the discrepancy between the declared contract price and the actual assignment consideration within 60 days of registration.
- Penalty Structure and Deterrence: Mr. Chen was assessed NT$1.275 million in back taxes (15% on NT$8.5 million), a negligence penalty of NT$1.275 million (100% of tax due), and interest at the statutory rate. The bureau warned that deliberate omission with intent to evade may incur criminal prosecution under Article 110 of the Tax Collection Act, carrying up to five years imprisonment.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement