Newsletter
BUSINESS TAX LAW AMENDED
The Business Tax Law was recently amended, reducing the business tax rate from five percent to two percent starting in July 1999 for banks, insurance firms, investment trust companies, securities houses, futures companies, commercial paper firms and pawn shops. The lower rate, however, does not apply to sales revenue other than sales from their trade of business.
In addition, except for the reinsurance premiums for insurance firms, firms must use three percent of sales revenue generated from their trade of business to write off had debts or provide allowance for potential bad debts within four years commencing from the enforcement of the amendment according to regulations issued by the competent authority. Within the four year period, if the amount of write-offs or allowance do not satisfy the requirement, the portion of the sales revenue which does not satisfy the requirement should be subject to business tax at three percent.