2023/10/03 Shall a whistle-blower reward granted by the tax authority be added to the gross consolidated income

The National Taxation Bureau of the Central Area, Ministry of Finance (NTBCA) indicated that some people recently inquired whether a whistle-blower reward granted by the tax authority shall be added to the gross consolidated income when declaring his/her annual income tax.

The Bureau stated that according to the Income Tax Act and Standards of Withholding Rates for Various Income, a whistle-blower reward shall not be added to the gross consolidated income, but shall be withheld at a 20% tax rate of the full payment at the time of payment by the tax withholder involved; therefore,when granting a whistle-blower reward, the tax authority must withhold a 20% tax rate of the full payment.

The Bureau provided an example of how much tax shall be withheld when granting a reward. In 2020 when receiving specific and credible information of a case where a taxpayer evaded tax through under-reporting the 2018 individual income tax return, the Bureau, upon verification of the information, fined the taxpayer NT$ 565,503 and rewarded the whistle-blower NT$113,100 (20 %  of the fine received). Therefore, after withholding NT$22,620(20% tax rate of the reward) in accordance with the regulations as previously mentioned, the whistle-blower actually received NT$90,480.

For questions or concerns, you are welcome to call our toll-free phone number 0800-000321. NTBCA will serve you with all sincerity.

Contact person, Mr. Tsai, Legal Affairs Division
Tel. No.: 04-23051111 Ext. 8154