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Taiwan’s Alternative Minimum Tax (AMT) Q&A

Q1: When did the Alternative Minimum Tax(AMT) come into effect in Taiwan??

A: The AMT in Taiwan came into effect in 2006.

Q2: How is the AMT calculated for legal entities and individuals in Taiwan?

A: The AMT in Taiwan is computed based on the following formula:

(Income subject to AMT – Deduction) × Tax Rate = AMT Payable

The 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.

Q3: How should overseas income of various categories be calculated?

A: Calculation of overseas income for various categories:

(1) In principle, the income amount can be calculated after deducting costs and necessary expenses.

(2) If unable to provide proof of costs and necessary expenses, the income amount can be calculated based on the deemed profit rate announced by the Ministry of Finance.

(3) However, if the actual income amount found by the tax authority is higher, the assessment will be based on the information found.