The Research On The Added Undistributed Earnings Under The Integration Of Income Tax System

After a long time of arguments and for catching up the world tendency, Taiwan government issues the tax integration system on 01-01-1998 which is a revolutionary reform in Taiwan taxation system. Owing to the repeated taxation phenomenon in the profit-seeking enterprises in Taiwan, government finally goes to the tax integration system but in order to stop the losses of the taxation and the unfairness of taxation, government issues the taxation of undistributed earning together with the integration system that will have extra 10% tax in undistributed business earning.The purpose of the taxation of undistributed earning is good, but the design of the system and the regulations are not complete enough lead the calculations in the system are too much complicated and unfair which spoil the original meanings of the government. This study analysis the differences of designs, income accounting and income tax to the taxation of undistributed earning system as well as her influences on all other aspects.This study researches the faults of the taxation of undistributed earning system according to the standard research methodology. Hoping the discussions and the suggestions in the study will give references to the related agents as follow.After the tax integration system goes in Taiwan, the repeated taxation phenomenon is getting better but the tax fairness for business income and personal income is getting worse. Besides, the incomplete regulations of the system lead the system to be the share holders' tax heaven. More ever it increases the cost of the tax administration and burdens the whole tax system. In order to enable the tax integration system works closely to the reality, the tax rate between business income and personal income should be more close to avoid the misleads caused from undistributed earning.