Fri, Feb 08, 2013 - Page 3 News List

Jiang dismisses tax fraud allegations

REGULATIONS:A land administration agent said the premier-designate might have withheld information from the land agency, in which case he could be charged with forgery

By Shih Hsiu-chuan  /  Staff reporter

Designated-premier Jiang Yi-huah, front, speaks at the Executive Yuan yesterday, saying that he is focusing on how to build a prosperous and secure future for Taiwan on the foundation laid by outgoing premier Sean Chen

Photo: CNA

Premier-designate Jiang Yi-huah (江宜樺) yesterday distanced himself from allegations of tax avoidance, saying that he “really had no idea” how his father had arranged the transfer of property he owned and insisted that there were no irregularities involved in his tax payments.

Jiang is facing questions about why he told a land agency that he bought an apartment and a parcel of land from his father when the transfer of ownership of the property was made in 2000, while he now claims that his father gave the property to him as a gift.

Wealth Magazine, a Chinese-language biweekly magazine, reported on Wednesday, that the transfer of ownership was arranged to avoid gifts taxes, but Jiang presented a gift tax certificate to rebut that allegation.

In response to media queries yesterday on why he submitted different information on the change of ownership was given to the land agency, Jiang denied he had played a role in the decision.

“I know nothing about the details of this case. All I know was that my father transferred the ownership of the property to me. He gave me the property as a gift, which was why we paid the gift tax, among other taxes and necessary fees, levied by the tax agency,” Jiang said.

Jiang said his father had entrusted a land administration agent to deal with the transfer.

“I respected my father’s wishes to transfer the ownership of the property to me and his way of handling the case,” he said.

In a telephone interview with the Taipei Times, land administration agent Chen Kun-han (陳坤涵) said that Jiang’s explanation “didn’t make any sense.”

Entrusting a land administration agent to handle the transfer without Jiang’s knowledge was not normal practice, because the agent would need to present a stamped contract for the sale of the property when he filed the registration with the land agency, Chen said.

“As a land administration agent, we usually do not use our trustees’ personal seals without letting them know to what kind of contract their chops are affixed,” Chen said.

Chen said that he suspected that Jiang decided to withhold the information that he obtained the property through donation and did not purchase it from the land agency to avoid a higher land value increment tax, a tax imposed on land owners when they transfer ownerships.

Under the current Land Tax Act (土地稅法), the land value increment tax rate levied on owners in a case of transaction of a self-use residence is 10 percent and in cases of donations the tax rate is between 20 percent and 40 percent, according to Chen.

“But in 2000, when Jiang’s transfer occurred, the tax rates applied to transfers of ownership by donation was between 40 and 60 percent,” he added.

Chen said that if his assumptions were true, Jiang could be charged with forgery of documents.

The gift tax certificate presented by Jiang might be sufficient to dismiss the allegations raised by Wealth Magazine that either Jiang or his father had tried to avoid gift tax, but the certificate has hinted that an irregularity was involved in the case — the contract for sale of property given to the land agency could be a fraudulent document, Chen said.

That the tax agency demanded Jiang’s father pay a gift tax of NT$294,142, rather than a higher amount, could mean that the tax was calculated based on publicly announced land value and not the real transaction price, Chen said.

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