Taiwan Reminds Taxpayers of Rules on Reasonable Interest for Inter-Company Lending

Taiwan's Ministry of Finance has issued a notice to remind taxpayers of the rules on reasonable interest for inter-company lending. The notice highlights two key points:

• Under Taiwan's Company Act, companies may only lend money to shareholders and other persons if:
  • there is an existing inter-company business transaction that justifies the loan arrangement; or
  • a short-term financing facility between companies is necessary; and
• Under paragraph 2, Article 24-3 of the Income Tax Act, if a pro…