On 10 January 2011, Legislative Yuan passed amendments to the Income Tax Act introducing thin capitalization rules under a new Art. 43-2. This provision is subject to the President's approval, and will have retroactive effect from 1 January 2011 upon promulgation. The most important points of this provision are: -   deductibility of interest: the debt-equity ratio is capped at a threshold to be specified by the Ministry of Finance, and interest expenses attributable to the excess portion of the debt will not be tax deductible; and -   tax return disclosure requirement: related party debt-equity ratios and other relevant...