Five new provisions regarding the protection of the taxpayer’s rights were added to the Tax collection Act in January, 2010; however, the protection provided therein was insufficient. To realize the protections granted in the Constitution for people’s right to life, right to work, right to property and other fundamental rights, the Legislative Yuan passed the Taxpayer Protection Act on December 9, 2016, which was promulgated by the President on December 28, 2016, and will come into force on December 28, 2017.
The Taxpayer Protection Act first prescribes the general principles of tax law, including the principles of taxation by law and taxation based on the ability-to-pay. Moreover, this Act stipulates the minimum amount necessary to maintain a basic standard of living for a taxpayer and his/her family members, which amount will not be subject to taxation. The amount is to be equal to sixty percent (60%) of the national median of disposable income in the most recent year.
With regard to the disclosure of information, unless related to government secrets, business secrets or personal privacy, this Act requires competent authorities to disclose its interpretations and other administrative regulations concerning taxation matters; otherwise, such information could not be cited in other cases. With regard to due process, the tax collection agency shall conduct investigations in accordance with its authority, and shall take into account all evidence, whether advantageous or disadvantageous to the taxpayer. Any evidence acquired through unlawful methods cannot be used as evidence for the imposition of taxes or penalties. Before deciding to impose a tax or penalty, the agency shall give the taxpayer a chance to explain. Moreover, during the investigation conducted by the agency, the taxpayer has the right to be accompanied by his/her attorney or assistant, and may refuse to respond or cooperate before the attorney/assistant’s presence. Also, after notifying the tax collection agency, the taxpayer may have the investigation proceedings recorded by video or audio recording devices, and the recording may be done by the taxpayer him/herself or through a request to the agency. After a re-investigation application is submitted, the taxpayer may apply to the tax collection agency for reading, transcribing, copying, video recording information which is related to taxation or penalties, and which is necessary for defending the taxpayer’s legal interests. In addition, before an adjudication is made by the Administrative Appeal Review Committee or before the conclusion of the oral argument on facts during administrative litigation, a taxpayer may add or amend the arguments or reasoning in support of the claim that the taxation decision was unlawful, and the Committee or the court handling the matter shall consider its merit. This also applies to the situation where the Committee or the court handling the administrative appeal itself ruled that the taxation decision was illegal
This Act specifies that the administrative and judicial agencies shall set up departments for taxation and taxpayer protection. First, more than two-thirds of the members of the Administrative Appeal Review Committee handling taxation issues shall be outside scholars and experts with expertise in law, tax, accounting and other relevant areas. Second, the administrative court handling the tax litigation shall set up a specialized tax court with judges specialized in taxation. Third, an advisory committee for protection of taxpayer rights shall be created at the central government level, responsible for studying and drafting the fundamental policies protecting taxpayers, promoting taxpayer protection, reviewing tax incentives, and monitoring the execution of information disclosure. Lastly, the tax collection agency shall have taxpayer ombudsmen, providing necessary advice and assistance to the taxpayer.
The tax collection agency is familiar with taxation matters. In contrast, taxpayers are in a weaker position. Thus, the Taxpayer Protection Act was passed to provide protections to taxpayers. This Act will come into force at the end of this year, and the details, such as enforcement rules and regulations, are to be supplemented by the competent authorities. It will take time to determine whether the protection of taxpayer’s rights is fully realized.