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  • 2024-07-19

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How does the profit-seeking enterprise calculate the imputation credit available to its shareholders?
Under the so-called integrated income tax reform bill, the shareholders are allowed a tax credit for the profit-seeking enterprise income tax paid on profits against their individual income tax liability. 
When making surplus earning distribution for the year 1998 or each ensuing year thereafter, a profit-seeking enterprise shall use the ratio of the amount of balance in its imputation credit account to the booked amount of balance in its undistributed surplus earning account as the tax deduction ratio in calculating the amount of imputation credit to shareholders based on the net amount of dividend or surplus earnings distributable to each shareholder or member. 
The tax deduction ratio and amount of imputation credit to shareholder shall be calculated as follows: 
Tax deduction ratio = amount of balance in the imputation credit account/ the aggregate amount of balance in the undistributed surplus earnings 
Amount of imputation credit to shareholder = amount of the net dividend (or surplus earnings) × tax deduction ratio 

Issued:Taxation Administration,Ministry of Finance,R.O.C Release date:2013-06-26 Last updated:2019-08-12