Luxury tax violations reported in southern Taiwan
Staff Reporter 2013-09-04 15:36
Tax authorities became suspicious when an apartment in this building in Tainan, registered as empty for more than two years, was found using a large amount of water. (File photo/Cheng Bing-chang)
The tax authority for southern Taiwan said on Sept. 2 that it has discovered people have been trying to get around paying the national tax on luxury consumption.
"Up to the end of July, we have discovered 19 cases regarding this issue and total fines of NT$29 million (US$966,000) has been issued," said Lu Chen-hsiu, deputy head of the National Taxation Bureau of the Southern Area.
Lu said most people trying to avoid the luxury tax do so by reporting and registering their purchases at lower prices, reporting and registering the property as a gift instead of a sale, processing the deal using the name of an unrelated third party, or "giving away" the property then selling it afterwards.
"The bureau is always able to track down violations or people alleged to have committed violations, even those who temporarily freeze the money transfer to avoid being spotted," Lu said. "I would urge the public to report and register as they are supposed to do."
Lu also said many offenders break the law because they were not familiar with the regulations. "I would urge them to contact us directly regarding any further inquiries. We will be more than happy to help," Lu said.
Taiwan's legislature approved the luxury tax on April 15, 2011 and the law became effective on June 1. It was designed as a redistribution of wealth tax to collect additional taxes from people who buy luxury items worth more than NT$3 million (US$100,000) such as private jets, boats, cars, golf club memberships and real estate properties.
For properties, the law states that a 15% of the transaction price will be due in tax if the owner sells it within a year after the purchase and 10% if it is resold in the second year after purchase.
The tax was designed to discourage real estate speculation which has driven up prices beyond the means of much of the public.
