[Taiwan] Taiwan Taxation

Tax System

Overview
– Corporate : income sourced from onshore and offshore are subject to income tax
– Individual : onshore income are subject to income tax ; offshore income are subject to alternative minimum income tax
– Information exchange : tax information only exchanged with Japan, Australia and USA
Advantage
– Corporate income tax is 20% which is lower than developed countries such as Japan, Korea and China
– Business tax is 5% which is lower than Singapore, Japan, Korea and China
– A good location for global wealth management due to limitation of information exchange with other countries

For entities registered in Taiwan, an income tax shall be levied on its total onshore and offshore income
In case the entity already paid income tax to foreign government for its offshore income, such paid tax may be deducted against the tax payable to Taiwan tax office (foreign tax credit)

Tax rate

Income	Tax Rate
General onshore income	20%
General offshore income	20%
Undistributed earnings of preceding year	0% for Taiwan branch ; 5% for Taiwan companies
Capital gain on sale of securities	0%
Dividend income	0% for dividend received from Taiwan companies ; 20% for dividend received from oversea companies

Income tax return due
– Annual corporate income tax return due on 31 May of following year for the year ended on 31 Dec
– Provisional income tax due on 30 Sep of current year for the year ended on 31 Dec
Loss carryforward
– Loss can be carry forwarded to against the profit for future 10 years
– Income tax return must be audited by a CPA for loss and profit years
Audit requirement
Corporate income tax return must be audited if :
– Financial institutions, e.g. banks, security and insurance companies
– Public companies
– Tax-exempted companies with sales over NTD$50 millions
– Annual sales over NTD$100 millions

Days in Taiwan	0~90 days	90~182 days	183~365 days
Resident status	Non-residence		Residence
Onshore income
Tax rate	18~21% depends on income type		5~40%
Offshore payment for service provided in Taiwan	Non-taxable	Taxable
Submit for tax return required ?	No	No(but yes if income was not subject to withholding)	Yes
Deadline for tax return	NA	NA(if yes, the early of 31 May or 1 week before departure)	The early of :31 May or1 week before departure
Offshore income
Tax rate	Non-taxable		20%(Alternative Minimum Tax)
Submit for tax return required ?	No		Yes
Deadline for tax return	No		The early of :31 May or1 week before departure

Exemption	Apply to	Amount (NTD$)
Exemption	Taxpayer, spouse and dependents	Fixed. 88K, 132K for age 70
Special Deduction	Apply to	Amount (NTD$)
Salary	Taxpayer, spouse and dependents	Max. 200K
Interest	Taxpayer, spouse and dependents	Max. 270K
Tuition	Dependents in college level above	Fixed. 25K
Sale property loss	Taxpayer, spouse and dependents	Max. gain amount
Child	Dependents of age 5 below	Fixed. 120K

Taxable Income × Tax Rate – Accumulated Difference

(Taxable Income + Exempted Income – NTD$ 6,700,000)×20%