Do Companies with No Revenue Still Need to File Taxes? Common Tax Filing Questions for Newly Formed Companies
After completing company setup, many new entrepreneurs often wonder: “Our company was just incorporated. This month we had zero orders, zero revenue, and issued no invoices. Do we still need to file taxes with the National Taxation Bureau?” The answer is: You absolutely must file!
In Taiwan’s tax system, “filing taxes (reporting)” and “paying taxes” are two distinct concepts. Even if a company generates zero revenue, issues no invoices, or operates at a loss, as long as the corporate entity remains active, it must complete a “zero-income declaration” with the tax authorities within statutory deadlines. Neglecting this procedure will result in administrative penalties such as late filing surcharges or non-filing fines.
Key Takeaway: Once company setup and tax registration are completed, regardless of whether you have active business or revenue, you are required to regularly submit filings for “Business Tax,” “Profit-Seeking Enterprise Income Tax,” and “Various Income Withholding.”
1. Why Must You File Taxes Without Revenue? What Happens If You Don’t?
The National Taxation Bureau relies on periodic corporate tax returns to monitor business operations and input/output tax statuses within its jurisdiction. Failing to file on time leads to common penalties and consequences:
- Imposition of Late Filing Surcharges & Non-Filing Fines: Pursuant to Article 49 of the Value-Added and Non-Value-Added Business Tax Act, overdue filings trigger a late filing surcharge (minimum NT$ 1,200). Continued failure to file after official notice results in a non-filing fine (minimum NT$ 3,000).
- Loss of Eligibility for Prior Input Tax Deduction: Input VAT invoices issued during the setup phase for purchasing equipment, interior decoration, or office rent may lose deduction eligibility if not filed on time.
- Flagged for Priority Inspection by Tax Authorities: Unreported zero-revenue periods trigger tax bureau alerts, leading to audit inquiries and impacting the company’s official tax credit rating.
2. Filing Timelines for the 3 Core Taxes of Newly Formed Companies
To help founders manage reporting schedules clearly, below is a summary of the main tax categories and filing deadlines during corporate operations:
| Tax Category | Filing Frequency & Deadline | Handling Procedure for Zero Revenue / No Transactions |
|---|---|---|
| Business Tax (VAT Form 401/403) | Bimonthly (By the 15th of odd-numbered months) E.g., Jan–Feb revenue filed by March 15 |
Submit a “zero-revenue filing.” If input VAT invoices exist for operational supplies, they can be declared as offset tax credits to be carried forward. |
| Profit-Seeking Enterprise Income Tax | Annually (May 1–May 31 each year) | Must complete annual settlement filings. Record preparation and operating expenses (rent, salaries, labor) as costs to report a net loss. |
| Various Income Withholding Filing | Annually (January 1–January 31 each year) | If payments were made for office rent, employee wages, or professional service fees, withholding certificates must be truthfully filed regardless of profitability. |
3. 4 Frequently Asked Questions (FAQ) for Newly Formed Companies
Q1: Can VAT invoices for interior decoration and office equipment purchased during the preparation phase be deducted?
Yes! Uniform invoices (triplicate) issued under the “Company Preparatory Office” or Tax ID during setup—provided they represent reasonable business-related expenditures—can be declared for input VAT tax deduction or carried forward to offset future output VAT once tax registration is complete.
Q2: If the company hasn’t secured clients yet, can we apply to suspend business operations (temporary closure) to avoid filing taxes?
You can apply for business suspension, but you must register the temporary closure with the governing authority and National Taxation Bureau. Note that tax periods “prior” to the effective date of suspension must still be filed; furthermore, if rent or withholding payments occur during suspension, annual withholding filings and corporate income tax returns remain mandatory.
Q3: What are the benefits of reporting expenses as losses in corporate income tax filings when there is no revenue?
Under tax regulations, if a company maintains sound bookkeeping and engages CPA tax audit certification, verified losses for the current year can be offset against net profits over the next 10 years (loss carryforward), effectively reducing corporate income tax burdens when the company becomes profitable in the future.
Q4: If we have very few invoices, is there a difference between self-filing and engaging a CPA firm?
Self-filing often leads to statutory non-compliance due to unfamiliarity with tax rules (e.g., mistakenly declaring non-deductible invoices or omitting income withholding statements), incurring penalties. Handing tax filings to professional CPAs eliminates non-filing risks and provides strategic long-term tax planning advisory.
4. Let Guan Yu CPA Firm Be Your Solid Financial & Tax Backing
Starting a business involves busy operational demands. Entrusting tedious bookkeeping and tax compliance to a professional team allows you to focus 100% of your energy on business development and revenue growth.
Guan Yu CPA Firm is located in Central District, Taichung City, offering transparent pricing and cloud-based digital management. We assist numerous newly formed companies with seamless setup registration, routine bookkeeping, tax filing, and rigorous tax planning to ensure full regulatory compliance.
Conclusion: Tax filing is a statutory obligation for active corporate entities; even without revenue, missing filings is strictly prohibited. If you have any questions regarding tax compliance for newly established companies, feel free to contact us for a consultation!
Have Questions About Tax Filings or Bookkeeping Processes for New Companies?
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