Victims of floods or other natural disasters may be entitled to a tax exemption on any compensation received from governmental agencies or other bodies. The conditions for a tax exemption on such form of compensation has recently been addressed in regulations issued earlier this year (namely, Royal Decree No. 527 dated 2 June 2001 and the Notification of Director-General of the Revenue Department No. 206 dated 3 October 2011). In particular, victims receiving compensation must meet the following conditions in order to qualify for a tax exemption:

1. For compensation provided by the government, the recipient must register with the applicable governmental agency providing the compensation;

2. For compensation not provided by the government, the recipient is entitled to a tax exemption only on those amounts covering actual damages incurred by the recipient.

3. The tax exemption must be used in the same calendar year (for individual recipients) or fiscal year (for corporate recipients) in which the victim receives such compensation.

4. For corporate recipients, a corporate tax exemption is available for compensation received from insurance companies with respect to the value of any insured property after accounting for depreciation expenses that apply to such property.