What is the definition of a small business entity in Taiwan? There are 4 criteria of a small business entity as below. The business scope is small. The monthly sales amount is lower than NTD$200,00. The monthly sales have been verified by the tax authority. Subject to tax registration if start to run the business. The VAT rate is 1% of the monthly sales. For example, if your monthly sales are NTD$80,000, you will be subject to NTD$800 per month and the payment should be made on a quarterly basis.
In general, a company should file the VAT return every 2 months in Taiwan. However, under certain circumstances, companies can apply for monthly VAT reporting after getting the approval from the tax authority.
The company preparatory office is a necessary process in the company incorporation in Taiwan.
Before a company is officially set up, a preparatory bank account needs to be opened by the representative for the initial capital injection. After the company is registered, the preparatory bank account should be transferred to the official account.
All companies in Taiwan are required to keep accurate and complete accounting records in accordance with Taiwan GAAP. This includes maintaining a general ledger, preparing financial statements, and keeping supporting documents such as invoices and receipts.
If a company has surplus earnings for the current year but has not distributed them in full or has only partially distributed them before the end of the following year, the undistributed portion shall be subject to a 5% undistributed earnings tax. In the case that the entire surplus is used to offset accumulated losses from previous years, no tax will be levied.
The AMT in Taiwan came into effect in 2006. The AMT in Taiwan is computed based on the following formula: (Income subject to AMT – Deduction) × Tax Rate = AMT PayableThe specific tax rates and deductions vary for legal entities and individuals. For legal entities, the AMT tax rate is 12% with a deduction of NTD 500,000. For individuals, the AMT tax rate is 20% with a deduction of NTD 6.7 million.
What are the most common types of work permit in Taiwan available for foreign professionals? There are 3 types of work permit most common for foreign professionals.
Can I apply for a tax refund for the tax paid for the payments made before the issuance date of approval letter? Yes, as long as the payments are made during the contract period, it can be applied to the preferential tax rate of the tax treaty.
the Taiwan company name must be registered in traditional Chinese. If you expect the company will make international transactions, you may additionally register a English name for your Taiwan company.
The withholding agent shall perform the withholding tax reporting for the previous year’s income information before the end of January each year.
All of business entities registered in the form of company need to file the company director and major shareholder reporting, such as limited company, limited company by shares.
Q1: What is the corporate income tax rate in Taiwan?
A: The corporate income tax rate in Taiwan is fixed at 20%.
you can set up a representative in Taiwan. However, the representative office cannot generate any revenue or perform the sales activities in Taiwan.
According to Article 15 of the Income Tax Act, even if a couple lives in different places, their income must be reported jointly.
If the heir continues to live in Taiwan and is a Taiwanese citizen, all property is subject to inheritance tax, both inside and outside of Taiwan.
If the heir is a Taiwanese citizen but has continued to live outside of Taiwan, inheritance tax will only be levied on the property in Taiwan
Taiwan Gift Tax – Property donated by a donor who is a resident of Taiwan is subject to gift tax regardless of whether Taiwan is located domestically or abroad.
Companies must use the domestic currency, the New Taiwan Dollar (NTD), for bookkeeping and settlement operations. Even if foreign currency is used for business needs, the settlement report must convert foreign currency into domestic currency.
Taiwan VAT is levied when goods or services are sold or imported within Taiwan.
The number of positive cases is rising rapidly recently. The Ministry of Finance urgently announced on 27th April 2022 that, considering the possibility of the spread of the epidemic caused by the crowds to the IRS in a short period of time, the income tax declaration will be extended by one month to the end of June. This is the extend the period for three consecutive years due to the pandemic. The extension applies both corporate income tax and personal income tax.