Taiwan

1. Overview 

1.1. Government and Tax System 
The Government of Taiwan comprises five Yuans (agencies): the Executive Yuan, the Legislative Yuan, the Judicial Yuan, the Examination Yuan, and the Control Yuan. The head of the Executive Yuan, the Premier, is appointed by the President, Taiwan's directly elected head of state.
The Income Tax Act constitutes the legal basis for imposing corporate income tax and individual income tax in Taiwan. The main source of tax laws in Taiwan are regulations and tax rulings issued by the Ministry of Finance (MOF), which is part of the Executive Yuan. For a link to the Income Tax Act, see [1.4]Section 1.4[end].
The MOF authorizes the national tax bureau to administer income tax in Taiwan. The Taxation Agency of the MOF is in charge of designing tax policies and the taxation system, and it supervises the collection of taxes and duties at all levels of the tax offices. There are five tax administrations under the MOF that are responsible for tax collection, among other things.
Taiwanese corporate and individual income taxes are imposed on a national level.
Taiwan income tax is supplemented by an alternative minimum tax (AMT), under the Income Basic Tax Act, applicable to resident individuals as well as resident corporations and foreign corporations with a fixed place of business in Taiwan. For a link to the Income Basic Tax Act, see [1.4]Section 1.4[end] and for more information about the AMT (including the AMT rates), see [3.1.2]Section 3.1.2[end].
Taiwanese corporations are taxed on their worldwide income, except for the capital gains on sales of Taiwanese companies' securities which are taxed under the Income Basic Tax Act. Taiwanese individuals are taxed only on their Taiwan-sourced income and their non-Taiwan-sourced income may be subject to AMT.
Business tax is imposed on the sale of goods or services within the territory of Taiwan and on the importation of goods. For more information, see the VAT Navigator.

1.2. Currency 
The currency in Taiwan is the New Taiwan dollar (NT$).

1.3. Membership of International Organizations 
Taiwan is a member of the WTO and the Asia-Pacific Economic Cooperation (APEC).

1.4. Official Websites 
In Taiwan, the following websites apply:
Government Agencies 
 Taxation Agency — https://www.dot.gov.tw
 Ministry of Finance — https://www.mof.gov.tw
 Ministry of Economic Affairs — https://www.moea.gov.tw
 Central Bank of Taiwan — https://www.cbc.gov.tw
 
Legislation 
 Income Tax Act — https://law.moj.gov.tw/LawClass/LawAll.aspx?pcode=G0340003
 Enforcement Rules of the Income Tax Act — https://law.moj.gov.tw/LawClass/LawAll.aspx?pcode=G0340004
 Income Basic Tax Act — https://law.moj.gov.tw/LawClass/LawAll.aspx?pcode=G0340115
 Enforcement Rules of the Income Basic Tax Act — https://law.moj.gov.tw/LawClass/LawAll.aspx?pcode=G0340116
 Regulations Governing Application of the Place of Effective Management — https://law.moj.gov.tw/LawClass/LawAll.aspx?pcode=G0340143
 Tax Collection Act — https://law.moj.gov.tw/LawClass/LawAll.aspx?pcode=G0340001
 Standards of Withholding Rates for Various Types of Income — https://law.moj.gov.tw/LawClass/LawAll.aspx?pcode=G0340028
 Statute for Industrial Innovation — https://law.moj.gov.tw/LawClass/LawAll.aspx?pcode=J0040051
 Regulations Governing Deductions for Companies or Limited Partnerships Investing in Smart Machinery, 5G Mobile Communication Systems, and Information Security Products or Services — https://law.moj.gov.tw/LawClass/LawAll.aspx?pcode=J0040062
 Act for the Development of Biotech and New Pharmaceuticals Industry — https://law.moj.gov.tw/LawClass/LawAll.aspx?pcode=J0040046
 Labor Insurance Act — https://law.moj.gov.tw/LawClass/LawAll.aspx?pcode=N0050001
 National Health Insurance Act — https://law.moj.gov.tw/LawClass/LawAll.aspx?pcode=L0060001
 Regulations on Deductions for Innovation R&D and Advanced Process Equipment Expenditures — https://law-out.mof.gov.tw/LawContent.aspx?id=GL011382
 Rules Governing the Application for Calculating Foreign Profit-seeking Enterprises' Income Pursuant to Paragraph 1, Article 25 of the Income Tax Act — https://law-out.mof.gov.tw/LawContent.aspx?id=FL042804

1.5. Automatic Exchange of Information 
For treaty information, including the number of agreements signed or in force, original treaty texts, translations, and consolidations, see the International Tax Treaties Collection.
The Tax Collection Act provides Taiwan with the legal basis to exchange tax information with jurisdictions that have a tax treaty with Taiwan on a case-by-case basis.1
Taiwan is not a signatory to the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information, but has enacted domestic legislation to implement the Common Reporting Standard (CRS).
Taiwan has signed a FATCA Model 2 IGA with the United States.
Taiwan is not a signatory to the Multilateral Competent Authority Agreement on the Automatic Exchange of Country-by-Country (CbC) Reports, but has enacted domestic legislation to implement CbC reporting.

2. Corporate Tax Computation and Administration 

2.1. Residence, Taxable Status, Entity Characterization 

2.1.1. Residence 
Companies incorporated in Taiwan and Taiwan branches of foreign companies (where the Taiwan branches of the foreign companies have been registered with the Ministry of Economic Affairs) are considered as tax residents in Taiwan.
The Place of Effective Management (PEM) rules were introduced into the Income Tax Act on July 27, 2016.2 Implementing regulations were announced on May 23, 2017. However, the Executive Yuan has yet to determine when they will come into effect.3 Under the PEM rules, a foreign company is deemed to have its head office in Taiwan and be subject to Taiwan income tax if its PEM is in Taiwan.
A foreign company is considered to have its PEM in Taiwan if all of the following requirements are met: 
 the company's decision maker who makes significant business, financial and human resource decisions is a tax resident individual in Taiwan or a Taiwanese company, or significant decisions concerning the company are made in Taiwan;
 the company's financial statements, records of accounting books, or minutes of meetings of the Board of Directors or of the shareholders are prepared or stored in Taiwan; and
 the company's major business activities are carried out in Taiwan.

2.1.2. Taxable Status 
Companies incorporated in Taiwan and Taiwan branches of foreign companies must file corporate income tax returns and pay corporate income tax.

2.1.3. Legal Classification of Nonresident Entities 
Foreign entities that are incorporated under foreign law as corporations (including LLCs) should be treated as corporations for Taiwan tax purposes.

2.2. Corporate Tax Base 

2.2.1. Resident Corporations 
Companies incorporated under Taiwan's Company Act are subject to corporate income tax on their worldwide net income. Taiwan branches of foreign companies, however, are subject to corporate income tax on their Taiwan-sourced income only.
Corporate income tax is imposed on all kinds of income, except for capital gains from the sale of Taiwan securities and futures. Instead, capital gains on the sale of Taiwan securities and futures are subject to the AMT.
For more information about the AMT, see [3.1.2]Section 3.1.2[end].

2.2.2. Nonresident Corporations 
For nonresident corporations, only its Taiwan-sourced income is subject to Taiwan corporate income tax.
Taiwan's definitions of a fixed Place of Business (FPOB) and business agent generally follow the definitions of a FPOB and agency for what constitutes a permanent establishment as prescribed under the OECD Model Convention.
The MOF issued an audit rule to regulate the tax implications for transactions through the internet. Payment received by a nonresident seller or service provider for providing customers with access to Taiwanese websites, cloud services, or downloadable information originated in Taiwan would be deemed Taiwan-sourced income, and therefore subject to Taiwan income tax.
Servers — Payment received by a nonresident seller or service provider through its servers or other computer equipment located in Taiwan may be deemed as Taiwan-sourced income, and therefore subject to Taiwan income tax.
Telephone presence — Payment received by a nonresident seller or service provider through extended or repeated telephone calls with customers may be deemed as Taiwan-sourced income, and therefore subject to Taiwan income tax.
Commissionaire sales — Payment received by a nonresident seller or service provider through commissionaires may be deemed as Taiwan-sourced income, and therefore subject to Taiwan income tax.
On January 2, 2018, the MOF issued a ruling4 to regulate the tax implications for foreign profit-seeking enterprises selling electronic services across borders to buyers in Taiwan. Fees received for the following electronic services may be deemed Taiwan-sourced income: 
 electronic products (such as stand-alone software or e-books, etc.) produced outside of Taiwan that are delivered via the internet or other electronic means to buyers in Taiwan, where the provision of the goods requires the assistance and involvement of a person or profit-seeking enterprise in Taiwan;
 real-time, interactive, handy, and continuing electronic services (such as online games, online films, etc.);
 selling via the internet or other electronic means services to be used in brick-and-mortar premises in Taiwan; and
 operating an internet-based platform on which sellers and buyers conduct transactions, if one of the transaction parties is a person, profit-seeking enterprise, or entity within Taiwan.
 
If the service recipient is an individual, the foreign service provider must file a tax return with the tax authority. If the recipient is a domestic company, they are required to withhold tax on the gross amount of the payment. See [5.4]Section 5.4[end].

2.2.3. Non-Corporate Business Entities 

2.2.3.1. Recognition 
Taiwan recognizes business entities other than corporations, including partnerships and sole proprietorships.

2.2.3.2. Tax Status 
All partnerships and sole proprietorships are treated as look-through entities for tax purposes, and accordingly are not subject to corporate income tax. Instead, their income is subject to personal income tax at the level of the partners or sole proprietor.

2.2.4. Permanent Establishments 

2.2.4.1. Domestic Law Definition 
Similar to the permanent establishment definition prescribed under the OECD Model Convention, Article 10 of the Income Tax Act defines a "fixed place of business" and a "business agent" as follows: 
 A "fixed place of business" refers to a fixed place for the operation of business, including administrative offices, branches, sub-branches, business offices, factories, workshops, warehouses, mines, and construction sites; but excluding warehouses or storage sites exclusively for the purchase of products and maintenance facilities that are not for processing or manufacturing products.
 A "business agent" refers to an agent who fulfills any of the following requirements:
o where the agent, in addition to representing a foreign entity in purchasing goods, is authorized to regularly represent the foreign entity in making business arrangements and in signing contracts;
o where the agent regularly keeps in storage goods of a foreign entity and delivers the same, for the foreign entity, to customers in Taiwan; or
o where the agent regularly accepts, for a foreign entity, orders from customers.

2.2.4.2. Treaty Definition 
In its treaty policy, Taiwan generally uses the OECD definition.

2.2.4.3. Creation via Performance of Services 
Under domestic law, the performances of services should not in itself create a permanent establishment.

2.2.4.4. Creation via Customer Downloads or Website Access 
Under domestic law, a nonresident corporation should not be treated as having a permanent establishment in Taiwan, even though it provides services to local customers to access Taiwan websites, or download information originated in Taiwan.

2.2.4.5. Creation via Cloud Services 
Under domestic law, a nonresident corporation should not be treated as having a permanent establishment in Taiwan, even though it provides local customers the use of internet cloud services.

2.3. Taxable Year 

2.3.1. Default Taxable Year 
The default income tax year is from January 1 to December 31. A corporation may change the commencing date of its tax year, subject to the tax authorities' prior approval.

2.3.2. Reference Year for Computation of Tax 
In a given taxable year, taxpayers are subject to tax on income earned in that year, and the income will be reported in the year following the relevant tax year. Thus, income earned, and therefore subject to tax, in 2024 will be reported in the tax return filed in 2025.

2.4. Computing Taxable Income 

2.4.1. General 
Taiwan corporate taxable income is determined by subtracting costs, expenses, allowances and losses from the corporation's annual revenue.

2.4.2. Exempt Income 
The following types of income are exempt from corporate income tax: 
 capital gains from transactions in Taiwan securities and futures;5 and
 dividend income received from other Taiwan corporations.6

2.4.3. Inventory Valuation and Inventory Flow 
Inventory may be valued at the lower of actual cost or net realizable value. Specific identification method, first-in first-out method, weighted average method, moving average method, or other methods approved by the competent authority may be used to record units moving into and out of inventory.

2.4.4. Depreciation or Capital Allowances 
Fixed assets (including immovable property and movable property) are normally depreciated on the straight-line method, over service life specified by the schedules issued by the tax authorities. The cost of intangible assets shall be amortized in equal annual installments in accordance with the prescribed number of years of amortization by the regulations.
For information on incentives for certain types of fixed assets, see [2.6.4]Section 2.6.4[end].

2.4.5. Reserves 
Reserves are not permitted as deductions for tax purposes except for: 
 bad debt reserves of 1 percent of the total balance of accounts receivable and notes receivable;
 inventory loss reserves resulting from the cost over the net realizable value of the inventory;
 employees' retirement fund reserves; and
 other reserves prescribed by other laws or specially approved by the MOF.

2.4.6. Special Allowances 
Taiwanese tax law provides deduction limits on interest expense, entertainment expense, and donations. According to a tax ruling issued by the MOF on June 20, 2018, individuals or companies making contributions and donations to central or local non-departmental public bodies, which are established in accordance with the Non-Departmental Public Bodies Act, are allowed to list the contributions and donations as itemized deductions in full without a deduction limit.

2.4.7. Special Provisions or Limits Applicable to Foreign Companies 
For a foreign company that has established a branch in Taiwan for conducting business in Taiwan, the Taiwan branch may be allocated the administrative expenses incurred by the foreign company.

2.5. Intercompany Dividends 
Dividends received by one resident company from another resident company are not subject to Taiwan income tax.

2.6. Special Tax Regimes 

2.6.1. Economic Zones 
Taiwan has the following types of economic zones: 
 Industrial Parks: for manufacturers;
 Technology Industrial Parks (formerly known as Export Processing Zones): for industries within designated customs bonded zones;
 Science Parks: for high-tech industries;
 Agricultural Biotechnology Parks: for agricultural and biotechnology industries;
 Environmental Science and Technology Parks: for green industries; and
 Free Trade Zones: for global logistics and operations management.
 
The regime for Free Trade Zones includes the following tax measures: 
 an exemption from customs duty, excise tax, business tax, trade promotion service fee and harbor service fee on commodities and equipment imported into a Free Trade Zone by a Free Trade Zone enterprise for its operations; and
 where a foreign enterprise or its Taiwan branch office stores goods or conducts simple processing in the Free Trade Zone by itself or through a Free Trade Zone enterprise, and then sells the goods to both domestic and foreign customers, the income so derived is exempt from income tax.

2.6.2. International Finance or Holding Companies 
Taiwan has no special tax regime for international financial companies or international holding companies.

2.6.3. Research and Development Companies and Activities 
Under Article 10 of the Statute for Industrial Innovation, companies that conduct research and development (R&D) activities may, if prior approval has been obtained from the competent government authorities, opt for one of the following incentives: 
 A credit of up to 15 percent of R&D expenses against their corporation income tax liability in the year in which the expense is incurred; or
 A credit of up to 10 percent of R&D expenses against their corporation income tax liability in each of the three years following the year in which the expense is incurred.7
 
Once an election is made, it cannot be changed. Under both options, the creditable amount is capped at 30 percent of the company's income tax liability for the year in which the R&D expense was incurred.
 Incentives for technological innovation  
Under the Statute for Industrial Innovation (known as the "Taiwan Chips Act") and implementing regulations, R&D incentives are available from 2023 through 2029 to a company that conducts technological innovation in Taiwan, occupies a key position in the international supply chain and satisfies the following conditions: 
 the company's R&D expenditure is at least NT$6 billion and the R&D intensity (i.e., the ratio of R&D expenditure to net operating income) is at least 6 percent in the relevant fiscal year;
 the company's effective tax rate (ETR) in the relevant fiscal is not below a specified rate (see below); and
 the company has not committed any serious violation of environmental protection, labor, food safety and health laws in the previous three years.8
 
The ETR is set at 12 percent in 2023 and 15 percent from 2024. The aim of the 15 percent rate is to align the ETR with international standards to help multinational enterprises adapt to Pillar Two of the OECD's Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy. For more information on Pillar Two, see the Bloomberg Tax "OECD Two-Pillar Global Agreement Watch".
Qualifying companies are entitled to offset the following credits against their corporation tax liability for the relevant year: 
 25 percent of expenditure incurred in the relevant year on cutting-edge, innovative R&D, capped at 30 percent of that liability; and
 5 percent of expenditure on the purchase in the relevant year of brand-new machines and equipment for own use in advanced manufacturing processes, again capped at 30 percent of the corporation tax liability for the year. The 5 percent credit is also subject to a minimum expenditure of NT$10 billion.9
 
If a company seeks approval to apply both credits in the same year, or applies them in combination with other statutory investment credits, the total credit is capped at 50 percent of the corporation tax liability for the year. This does not apply if the year is the final deduction year and the deduction amount is not limited by other legislation.
Companies that receive the 25 percent credit cannot also claim the credit under Article 10 of the Statute for Industrial Innovation referred to above. Similarly, companies that receive the 5 percent credit are not eligible for other statutory incentives relating to investment in machinery and equipment.

2.6.4. Other Special Regimes 
 Biotech and pharmaceutical industries  
The following incentives apply to qualifying biotech and pharmaceutical companies until December 31, 2031: 
 Biotech and pharmaceutical companies engaged in the research, development and manufacture of new medicine, new dosage forms, high-risk medical devices, regenerative medicine, precision medicine, digital medicine, innovative technology platforms dedicated to the biotech and pharmaceutical industry, and other strategic biotech and pharmaceutical products are entitled to apply up to 25 percent of the total amount invested in the associated R&D activities as a tax credit against the corporate income tax liability within five years from the first tax year in which the income tax liability is incurred. The total creditable amount for each tax year (except for the final tax year) is capped at 50 percent of the company's income tax liability payable in the relevant tax year.10
 Biotech and pharmaceutical companies can opt for one of the following incentives if they invest more than NT$10 million (but not more than NT$1 billion) in a tax year in brand-new machinery, equipment or systems used in production and manufacturing:
o a credit of up to 5 percent of qualifying expenditure against their corporate income tax liability in the first tax year in which the income tax liability is incurred; or
o a credit of up to 3 percent of qualifying expenditure against their corporate income tax liability within three years from the first tax year in which the income tax liability is incurred.11
 
Once an election is made, it cannot be changed. Under both options, the annual creditable amount is capped at 30 percent of the company's income tax liability for that tax year. Where a company is eligible for this and other types of investment credits in the same tax year, the combined creditable amount for each tax year cannot exceed 50 percent of the company's tax liability for that tax year. That cap does not apply to the final tax year in which the company is eligible for the credit. 
 Corporate investors who subscribe for shares issued by qualifying biotech and pharmaceutical companies and have been registered shareholders for at least three years are entitled to apply up to 20 percent of the subscription cost of the shares as a tax credit against their corporate income tax payable for a period of five years starting from the first tax year in which the tax liability is incurred (provided the company has not applied for a corporate income tax exemption or shareholder investment credit based on the subscription price in accordance with any other laws). The creditable amount for each tax year is capped at 50 percent of the company's income tax liability for that year.12
 If the corporate investor is a venture capital business, the corporate shareholders of the venture capital business may claim a deduction in their corporate income tax liability for a five-year period starting from the fourth year after the venture capital business becomes a registered shareholder of the qualifying biotech or pharmaceutical company. The amount of deduction applicable for each corporate shareholder of the venture capital business is based on (i) the total deductible amount to which the venture capital business is entitled and (ii) each corporate shareholder's respective shareholdings in the venture capital business. The creditable amount for each year is capped at 50 percent of the company's income tax liability for that year.13
 
 Investment in smart machinery, 5G mobile communication systems and information security  
Until December 31, 2024, qualifying companies can opt for one of the following incentives if they invest over NT$1 million but less than NT$1 billion in a tax year in brand-new smart machinery for self-use, the introduction of 5G mobile communication systems, or brand-new hardware, software, technology or technology service related to information security products or services: 
 a credit of up to 5 percent of qualifying expenditure against their corporate income tax liability in the year in which the expenditure is incurred; or
 a credit of up to 3 percent of qualifying expenditure against their corporate income tax liability within three years from the year in which the expense is incurred.14
 
Once an election is made, it cannot be changed. Under both options, the creditable amount is capped at 30 percent of the company's income tax liability for the year in which the expenditure is incurred.
Where a company is eligible for this and other types of investment credits in the same tax year, the combined creditable amount for tax each year cannot exceed 50 percent of the company's tax liability for that year. That cap does not apply to the final tax year in which the company is eligible for the credit as stipulated under other laws.
Investment in government-approved infrastructure projects 
 A company can enjoy a five-year tax exemption on business profits derived from government-approved infrastructure projects.
 A private company investing in a government-approved infrastructure project may credit R&D, personnel training, and capital expenditure on buildings, operating equipment or technology incurred on such an investment against its corporate income tax liability starting from the year the expenditure was incurred for five years.
 Corporate shareholders holding registered stock issued by a private company in a government-approved infrastructure project for at least four years can offset the shareholder investment tax credit against their corporate income tax liability up to 20 percent of the cost of the shares.

2.7. Double Taxation Protection 

2.7.1. Mechanics 
Double taxation is avoided by allowing a tax credit for the income tax paid in foreign jurisdictions, up to the amount of the tax payable on such foreign-sourced income.15

2.7.2. Treaty or Statutory Priority 
According to Article 25 of the Regulations Governing Application of Agreements for the Avoidance of Double Taxation with Respect to Taxes on Income, if the domestic rate is higher than the maximum treaty rate, a taxpayer resident in a treaty jurisdiction may benefit from the reduced maximum treaty rate.
In order to benefit from reduced treaty rates for interest, dividends, royalties, and technical service fees, the foreign taxpayer must submit a Certificate of Residence issued by the tax authority of the other contracting state, and a Declaration of Beneficial Ownership, for the statutory tax withholder to withhold tax in accordance with the reduced tax rate, as stipulated in the tax treaty.
For treaty information, including the number of agreements signed or in force, original treaty texts, translations, consolidations and any modifications made by the Multilateral Instrument, if applicable, see the International Tax Treaties Collection.

2.7.3. Source of Interpretation 
Taiwan generally follows the OECD model treaty and commentary with respect to its treaty policy and interpretation.

2.8. Returns and Filing Dates 

2.8.1. Filing Deadline 
Corporate tax returns are due by the end of the fifth month following the end of a company's fiscal year. Thus, for companies whose fiscal year is the calendar year, the return is due no later than May 31 each year.

2.8.2. Filing Method 
Corporations may choose to file their income tax returns either on paper or electronically.

2.8.3. Extensions 
The tax return due date is May 31 each year, and an extension is not allowed. If May 31 falls on a Sunday or a Saturday, the due date for the tax returns is automatically extended to June 1 or June 2 respectively.

2.8.4. Penalties 
If a corporation does not file its income tax return on time, the tax authorities will levy a surcharge. The amount of this surcharge should not be less than NT$1,500 or more than NT$30,000.

2.9. Payment Mechanics 

2.9.1. Internal Withholding on Resident Companies 
Taiwan imposes the following withholding taxes on Taiwanese companies or foreign companies with a fixed place of business in Taiwan: 
 salaries are taxed at a rate of 5 percent;
 commissions are taxed at a rate of 10 percent;
 interest income is taxed at rates of 10 percent;
 rental income is taxed at a rate of 10 percent;
 royalties are taxed at a rate of 10 percent;
 income from professional practice is taxed at a rate of 10 percent;
 income from pension funds and severance pay is taxed at a rate of 6 percent on the taxable portion; and
 dividends are exempt.16
 
The tax withheld can be applied by a company to reduce the provisional tax liability or the income tax liability.

2.9.2. Schedule for Tax Payments or Deposits 
Corporate taxpayers must make a provisional payment to the Treasury during September of each year. The amount of this provisional payment should be equivalent to one-half of the corporate income tax payable in the previous year. Alternatively, for a corporate taxpayer that keeps complete accounting books and records, entrusts a CPA to examine and certify its provisional tax return, and files the return within the prescribed period, it may compute the provisional tax payment based on the operating income derived in the first six months of the current year at the current year's applicable tax rate.17
In certain limited circumstances, taxpayers may apply for an extension or for an arrangement to pay tax by installments over a maximum period of 36 months. Where such an application is granted, interest is payable on the installments. The tax authority may require taxpayers to provide collateral if the amount of the tax payable in installments is at least NT$1 million for an individual or at least NT$2 million for a profit-seeking enterprise.18

2.9.3. Electronic Payments 
Taiwan does not require companies (whether foreign or domestic) to establish a local bank account and provide for electronic transfers to the tax authorities.

2.9.4. Interest and Penalties 
If a corporation does not pay any tax at the time payment is due, it is subject to a surcharge for delinquent payment at the rate of 1 percent of the amount of the payment due for every three days of delay, up to 10 percent of the amount of the payment due. If the payment is still not made within 30 days after the time limit, the tax authorities may, in addition to referring the case for enforcement, order a suspension of business until the date of payment.
Also, the corporation must pay the tax payable plus interest based on the fixed interest rate of the payment year for the one-year time deposit of postal savings.
If a corporation files an annual tax return, or other prescribed form for reporting income, which omits or underreports its taxable income, a fine of no more than twice the amount of the underreported tax payable may be imposed. If a corporation fails to file an annual tax return or other prescribed form for reporting income, a fine of no more than three times the amount of tax payable may be imposed. If no tax is due or payable by the corporation after the amount of income omitted, underreported or undeclared is added to its taxable income, then a fine of not less than NT$4,500 but not greater than NT$90,000 may be imposed.

2.10. Statute of Limitations 
The statute of limitations for the Taiwan tax authorities to determine and pursue outstanding tax is five years. The limit can be extended to seven years if the taxpayer did not file a tax return within the statutory period or has intentionally evaded such tax payment by fraud or any other unlawful means. The statute of limitations can be further extended as follows: 
 for six months if the tax authority is unable to make a decision due to an event of force majeure;
 for one year if, on a re-examination, the tax authority revokes a decision it has made on imposing sanctions or such a decision is revoked by the Ministry of Finance on an administrative appeal or by the court on an administrative lawsuit.19

3. Corporate Tax Rates 

3.1. National Taxes 

3.1.1. Corporate Tax Rates 
Current rate: 20 percent.
The standard corporate income tax rate in Taiwan is 20 percent, subject to an exemption threshold as follows:
 if annual taxable income is NT$120,000 or less – the total amount of income is exempt from income tax;
 if annual taxable income exceeds NT$120,000 – total annual income is subject to the 20 percent standard rate (i.e., no exemption is available), but the amount of income tax payable cannot exceed the equivalent of 50 percent of the amount of taxable income exceeding NT$120,000.

3.1.2. Alternative Tax Regime 
Taiwan imposes an alternative minimum tax (AMT, also known as income basic tax or IBT) on Taiwan resident individuals and "profit seeking enterprises". Profit seeking enterprises subject to AMT include Taiwan resident corporations as well as nonresident corporations with a fixed place of business or a business agent in Taiwan.
Under Article 3 of the Income Basic Tax Act, various entities are excluded from the AMT regime, including: 
 a profit-seeking enterprise organized in a form of sole proprietorship or partnership;
 an organization or society established for educational, cultural, public welfare or charitable purposes;
 a profit-seeking enterprise with basic income of less than NT$600,000; and
 an individual with basic income of less than NT$7.5 million (NT$6.7 million in 2023 ).
 
The AMT rates on individuals and corporations are 20 percent and 12 percent respectively.
The AMT system uses a different set of rules to determine taxable income. For profit seeking enterprises, the amount subject to AMT is the entity's taxable income, subject to various adjustments listed in Chapter 2 of the Income Basic Tax Act, less a deduction of NT$600,000.20 For individuals, the amount subject to AMT is the individual's net taxable income, subject to various adjustments listed in Chapter 3 of the Income Basic Tax Act, less a deduction of NT$7.5 million.21
If the amount of AMT exceeds the amount of income tax payable, the excess is payable to the tax authorities.

3.1.3. Special Reduced Rates or Regimes 
For the special regime for repatriated overseas funds, see [9.4]Section 9.4[end].

3.1.4. Special Additional Taxes or Levies 
For the tax on retained earnings, see [3.3]Section 3.3[end].

3.2. State, Cantonal, Provincial or Other Local Taxes 

3.2.1. Main Rates 
There is no local corporate income tax in Taiwan.

3.2.2. Reduced Rates 
There is no local corporate income tax in Taiwan.

3.2.3. Income Tax Base 
There is no local corporate income tax in Taiwan.

3.2.4. Income Tax Deductions 
There is no local corporate income tax in Taiwan.

3.2.5. Incentives 
There is no local corporate income tax in Taiwan.

3.2.6. Non-Income Taxes in States 
There is no local corporate income tax in Taiwan.

3.3. Taxes Imposed as a Penalty 
 Retained earnings tax  
In order to discourage a company from retaining earnings, an additional tax of 5 percent (10 percent before January 1, 2018) is payable on earnings retained and not distributed to the shareholders by the end of the year following the year that the earnings were generated.
If, in respect of undistributed earnings derived in tax year 2018 or subsequent tax years, a company uses, within three years after the year in which they were derived, at least NT$1 million of those earnings to construct or purchase buildings, software or hardware equipment, or technology for use in production or operations necessary for its business or ancillary business, it can deduct the sum expended when calculating undistributed earnings for the purposes of the 5 percent additional tax. The deduction does not apply to the purchase of land or of appliances and equipment that are not items of capital expenditure. Where the investment reaches the NT$1 million threshold after the undistributed earnings have been declared for the purposes of the 5 percent additional tax, the company can apply for an adjustment and refund for up to one year after completion of the investment.22

4. Corporate Tax Capital Gains, Losses, Group Treatment 

4.1. Taxation of Corporate Capital Gains 
Capital gains generated by a corporation are treated as regular income and taxed at the usual corporate income tax rate (see [3.1.1]Section 3.1.1[end]). However, capital gains from the sale of (1) Taiwanese securities and futures; and (2) real property are subject to special rules.
 Capital Gains from Sale of Taiwan Securities and Futures  
Capital gains from sale of Taiwan securities and futures are exempt from corporate income tax. They are, however, included in the corporation's basic income for calculating its AMT liability (see [3.1.2]Section 3.1.2[end]).
Fifty percent of any net capital gain from the sale of Taiwan securities and futures (i.e., after deducting the capital loss) is exempt from AMT if the shares are held for more than three years.
A nonresident company without a fixed place of business in Taiwan is exempt from corporate income tax and the AMT on the sale of Taiwan securities and futures.
Capital losses from the sale of Taiwan securities and futures cannot be offset against business income when calculating corporate income tax.23 For the purposes of calculating the AMT, however, net capital losses from the sale of Taiwan securities and futures can be carried over for five years to offset against capital gains from the sale of such securities and futures.24
The transfer of securities and futures may also be subject to securities transaction tax (see [9.4]Section 9.4[end]).
 Capital Gains on the Transfer of Real Property Acquired on or after January 1, 2016  
Capital gains tax is applicable on the sale of real property, including pre-sale homes (i.e., homes sold while under construction), that is acquired on or after January 1, 2016. Different rates apply depending on whether the seller is a resident or nonresident corporation and also on the length of time the seller has held the property.25
The following rates apply: 
 Sale by resident companies:
o held for two years or less — 45 percent;
o held for more than two years and up to five years — 35 percent; and
o held for more than five years — 20 percent;
 Sale by nonresident companies:
o held for two years or less — 45 percent; and
o held for more than two years — 35 percent.
 
Certain involuntary sales are taxed at a rate of 20 percent if the holding period of the real property is less than five years.
The above rates also apply to gains from direct or indirect share transfers by companies that hold more than 50 percent of the shares of a resident or nonresident company, where more than 50 percent of the value of the shares is made up of real property located in Taiwan.26 Listed and over-the-counter shares are excluded.
 Capital Gains on Property Transfers — Old Real Property Taxation Regime  
A different taxation regime applies to transfers of: 
 real property acquired on or before January 1, 2014; and
 real property acquired on or after that date but before January 1, 2016, and held for over two years.
 
Gains from the sale of land are exempted from income tax, but are subject to the land value increment tax. For more information on the land value increment tax, see [9.3.1]Section 9.3.1[end].
Gains from the sale of a building are subject to income tax and, in most cases, the gains are assessed based on the government-assessed value of the building (usually lower than the actual sale price).

4.2. Definition of Corporate Capital Gains 
In Taiwan, capital gain is, generally, the difference between the sale price or amount realized for a capital asset reduced by the original cost.
A capital asset is, generally, the asset of a business, other than trading stock and includes: 
 business premises;
 land; and
 securities and futures.
 
In general, there is no distinction between short-and long-term capital gains/assets in Taiwan. However, the period of time from the property purchase will have an impact on the rate of tax for real property sales. 
Furthermore, currently the capital gains generated by a corporation from sale of Taiwan securities and futures are exempt from corporate income tax, though the capital gain from such sales must be included as part of taxable basic income in calculating the AMT payable. 
For further information, see [4.1]Section 4.1[end].

4.3. Computation 
Capital gain is arrived at by subtracting the original cost and the transaction expenses from the sales revenue.

4.4. Corporate Combinations and Divisions 

4.4.1. Mergers 
The Business Merger and Acquisition Act provides tax benefits for eligible mergers, acquisition of property, share transfers and divisions.
When two companies merge, neither company is taxed on the gain from transferring the assets of a dissolved company to the surviving company, but the premium of the merger price in excess of the original acquisition costs of the dissolved company, if any, would be deemed to be dividend income distributed to the shareholders of the dissolved company and therefore subject to income tax.

4.4.2. Transfers of Corporate Property 
Any gains generated from the transfer of its entire or a substantial portion of its business or assets to another company are exempt from corporate income tax where at least 80 percent of the consideration is paid by shares with voting rights, and the company subsequently transfers all of the acquired shares to its shareholders.
In the case of dissolution of a business into a new organization, sales tax will be imposed on the transfer of fixed assets. Therefore, the owner of the new business is compelled to obtain and report uniform invoices.

4.4.3. Share Transfers 
When transferring the shares in a Taiwan entity, if the transferor is a company, any capital gain generated from the transfer of shares is exempt from income tax. However, if the transferor is a Taiwanese company or a foreign company with a fixed place of business or business agent in Taiwan, the gain must be included in the company's basic income for calculating the AMT. Fifty percent of net capital gains are exempt from AMT if the shares are held for more than three years.
For disposals of shares in a Taiwanese entity on or after January 1, 2016, if the transferor is an individual, any capital gains generated from the transfer of shares is exempt from income tax. However, a Taiwanese individual's gain from the disposal of shares in an unlisted Taiwanese company must be included in the individual's basic income for the purposes of calculating the AMT.

4.4.4. Divisions or Separations 
Corporate income tax may be exempt under a division/demerger, if the company under a division/demerger acquires the shares from an existing or a newly incorporated company, and the company consequently transfers all of the acquired shares to its shareholders.

4.5. Position of Losses from Business Operations 

4.5.1. Definition 
Business loss includes capital loss except for loss from: (i) the sale of real property and (ii) the sale of Taiwan securities and futures.
A company's foreign losses can offset its domestic income provided that the company can provide evidentiary documents to the tax authorities' satisfaction.

4.5.2. Treatment 
Operating losses cannot be carried back to prior years in Taiwan. Operating losses can be carried forward for 10 years.27
The Taiwanese tax authorities have clarified that investment income which is not included in the taxable income in the year of the loss, being exempt under Article 42 of the Income Tax Act, must be deducted from the carried forward loss.28 The remaining loss can be offset against the net income of the current year, as shown in the following example:
In 2024, Company A has operating losses of NT$3 million and non-taxable dividends of NT$1 million. In 2025, Company A's net income is NT$8 million. Company A is permitted to carry forward only NT$2 million of the 2024 losses (i.e., NT$3 million losses less NT$1 million investment income) to offset against its 2025 net income. As a result, Company A's taxable income for 2025 is NT$6 million.

4.5.3. Losses After Change in Ownership 
A company may continue using previously incurred losses after a significant change in its ownership (shareholders). This is because the legal entity (the company) remains unchanged.
However, losses incurred by the surviving company after a merger or acquisition must be declared within 10 years after the merger. Before the loss can be deducted, the shareholders must prove the existence of the amount of equity interest in the new company within 10 years of the merger or acquisition.

4.6. Group Treatment 

4.6.1. General Rule 
Separate corporations can be treated as a single tax group in Taiwan.
A parent company may act as the taxpayer for itself and its group subsidiary(ies) by filing a consolidated income tax return. All the taxable income of each member and the taxable loss of each member will be summed up to arrive at the net taxable income of the taxpayer (the parent company).

4.6.2. Definition of Group 
An election is available to file a consolidated tax return when a parent company holds 90 percent or more of the shares in its Taiwanese subsidiaries for the full tax year. A foreign subsidiary cannot be included in its Taiwan parent company's consolidated income tax return.
Group treatment is determined by the parent company at its discretion and no approval from the tax authorities is required.
When a tax group is elected, all the Taiwanese subsidiaries in which the parent company holds 90 percent shares or more must be included.

4.6.3. Special Aspects 
Intercompany dividend treatment within a tax group is treated in the same way as the normal treatment of dividends between resident companies.
Intercompany asset transfer treatment within a tax group is treated in the same way as the normal treatment of asset transfers between resident companies.
Any capital gain on the sale of a member's stock is exempted from income tax but should be included in the tax group's basic income for calculating the AMT.

5. Corporate Withholding Taxes on Nonresident Corporations 

5.1. Dividends 
Taiwan companies are required to withhold income tax at 21 percent upon distributing dividends to any foreign shareholder, unless the shareholder is from a jurisdiction with which Taiwan has a tax treaty and a reduced withholding rate is provided under the tax treaty.29

5.2. Interest 
Taiwan companies are required to withhold income tax at 20 percent or 15 percent (depending on the type of investment that the interest derives from) upon distributing interest to any foreign entity, unless a reduced withholding rate or tax exemption is provided under a tax treaty or tax law.30
The 15 percent interest rate applies to interest from: (1) beneficiary securities or asset-backed securities issued in accordance with the Financial Asset Securitization Act or the Real Estate Securitization Act; and (2) government, corporate or financial bonds.

5.3. Royalties 
Taiwan companies are required to withhold income tax at 20 percent upon paying royalties to a foreign entity, unless a reduced withholding rate or tax exemption is provided under a tax treaty or tax law.31
The Income Tax Act provides exemptions for certain types of royalties paid to nonresidents.

5.4. Services 
Taiwan companies are required to withhold income tax at 20 percent upon paying service fees, which constitute Taiwanese-source income, to a foreign entity, unless a reduced withholding rate or tax exemption is provided under a tax treaty or tax law.32
Under Article 25 of the Income Tax Act, where a foreign entity is engaged in certain business activities in Taiwan (e.g., international transport, construction contracting, technical services or machinery and equipment leasing), and the costs and expenses of those activities are difficult to calculate, the entity may apply to the tax authorities to treat 10 percent of its total business revenue (in the case of an entity engaged in international transport business) or 15 percent of its total business revenue (in the case of an entity engaged in other businesses) as taxable income in Taiwan. If the tax authorities approve the application, income tax can then be withheld at 2 or 3 percent (i.e., the 20 percent withholding tax rate applied to a deemed profit of 10 or 15 percent). Guidance on the application of the deemed profit method is provided in the Rules Governing the Application for Calculating Foreign Profit-seeking Enterprises' Income Pursuant to Paragraph 1, Article 25 of the Income Tax Act.33 The Rules clarify that the deemed profit method is not applicable to "labor dispatch services". Whether a service qualifies as a labor dispatch service depends on certain criteria specified in the Rules, including whether the dispatched personnel are mainly subject to the control, supervision or performance evaluation of the domestic dispatch institution. The Rules also provide that technical services include planning, design, installation, maintenance, consultation, testing and training. For a link to the Rules, see [1.4]Section 1.4[end].
Where a foreign entity has no permanent establishment or business agent in Taiwan, and receives remuneration or profit for services rendered from operations originating in Taiwan, it can request the tax authority to recalculate the exact amount of the income based on supporting documentation provided by the foreign entity within ten years from the date on which the remuneration or profit was received.34 A refund can be claimed if there are any tax sums withheld in excess of those statutorily required as a result from the recalculation by the tax authority.
Further, a foreign entity that has no permanent establishment or business agent in Taiwan can apply to the tax authority for an advance agreement on the profit margin and degree of contribution to the domestic profit before receiving remuneration or profit from such operations.35 This involves adopting a deemed profit ratio and a contribution ratio which will be used to calculate the remuneration or profit from which the tax can be withheld, so that no tax recalculation or refund is required.
The deemed profit ratio is derived as follows: 
 if there are accounting books and records that can be used to verify costs and expenses, the deemed profit ratio is the net profit from Taiwanese-source income, based on those books and records;
 if the conditions in the paragraph above cannot be met, but the foreign entity (i) has entered into a similar contract on similar terms with the same Taiwanese counterparty in Taiwan and (ii) has obtained a deemed profit approval based on the accounting books and records verified by the tax authority within the three most recent years, then the deemed profit ratio will be the average of those previously approved deemed profit ratios;
 if the conditions in neither of the two paragraphs above can be met, but the contract, the main business scope, the transaction processes inside and outside Taiwan, and other relevant supporting documents are duly provided, then it is permissible to use a deemed profit ratio approved under comparable industry standards.
 
The contribution ratio is derived as follows: 
 from documents that substantiate the contribution level inside and outside Taiwan, such as a CPA audit report, a transfer pricing report, etc.;
 if the conditions in the paragraph above cannot be met, but the foreign entity (i) has entered into a similar contract on similar terms with the same Taiwanese counterparty in Taiwan and (ii) has a contribution ratio, approved by the tax authority, based on documents substantiating the contribution level inside and outside Taiwan within the last three years, then the contribution ratio will be the average of those previously approved contribution ratios;
 if the conditions in neither of the two paragraphs above can be met, then the contribution ratio is deemed to be 100 percent.

5.5. Other Withholding Taxes 
If a foreign entity generates capital gain from the alienation of real property in Taiwan, it should engage a tax agent to file an income tax return and pay income tax on the net capital gain. See [4.1]Section 4.1[end] for the applicable tax rates.
Commissions, rentals, remuneration for services rendered in Taiwan are all subject to 20 percent withholding tax, unless a reduced withholding rate or tax exemption is provided under a tax treaty or tax law.

5.6. Special Tax Havens Rates 
In Taiwan there are no special tax havens rates.

6. Personal Taxes 

6.1. Domicile and Residency Requirements 
Individuals are deemed tax resident in Taiwan if they: 
1. have a domicile in Taiwan and habitually live in Taiwan; or
2. have no domicile in Taiwan but stay in Taiwan for at least 183 days in total in a tax year.36
 
In relation to the first type of tax residency (i.e., have a domicile in Taiwan and habitually live in Taiwan), the Ministry of Finance released an interpretation which states that this requirement is met if an individual has a household registration in Taiwan within the tax year and has stayed in Taiwan for a total of: 
 31 days in a tax year; or
 more than 1 day but less than 31 days in a tax year, provided that the center of their personal life and economic interests is in Taiwan.37
 
When determining an individual's center of personal life and economic interests, the tax authorities will consider the following factors: 
 whether the individual is entitled to social welfare, such as national health insurance, labor insurance, national pension insurance or farmer health insurance;
 whether the individual's spouse or minor children live in Taiwan;
 whether the individual operates a business, provides professional service, manages property, provides services or serves as a director, supervisor or manager in Taiwan; and
 other relevant facts and circumstances.
 
The period of residency is calculated according to the entry and exit dates stamped in the person's passport. The period of residency is accumulated for foreigners who enter and leave Taiwan numerous times within a taxable year.

6.2. Income Tax Base 

6.2.1. Tax Base for Residents 
Individual tax residents are subject to Taiwan income tax for their Taiwan-sourced income only but should include overseas income as basic income in determining whether any AMT is payable, unless the total amount of overseas income is below NT$1 million or total basic income is less than NT$7.5 million.
For more information about the AMT, see [3.1.2]Section 3.1.2[end].

6.2.2. Tax Base for Nonresidents 
Individuals who are non-Taiwan tax residents are subject to Taiwan income tax for their Taiwan-sourced income only and will have no AMT issue.

6.2.3. Personal Income Subject to Income Tax 
 Income tax base  
Individual tax residents are subject to Taiwan income tax for their Taiwan-sourced income only but should include overseas income as basic income in determining whether any AMT is payable, unless the total amount of overseas income is below NT$1 million or total basic income is less than NT$7.5 million.
 Excluded income  
Deductions and allowances are summarized in [6.2.4]Section 6.2.4[end].
Interest exemptions are discussed in [6.5.1]Section 6.5.1[end].
 Treatment of benefits  
Up to 6 percent of an employee's monthly wage or salary may be deducted from the employee's taxable income from salary or wage in the year concerned as contribution to the lump sum of the voluntary pension and the voluntary annuity insurance premiums according to the Labor Pension Act.
 Service income  
In general, service income will be taxed in Taiwan if attributable to Taiwan employment and will be taxable in the year such income is received. Therefore, if a nonresident individual who leaves Taiwan after a temporary work posting, receives a bonus attributable to that posting, the individual would generally be subject to Taiwan income tax on it, unless otherwise exempt by a tax treaty or tax law.
The tax rate on salary paid to a nonresident individual is (i) 6 percent where the monthly salary is no greater than one and a half times the monthly minimum wage as determined by the Executive Yuan and (ii) 18 percent where the monthly salary is greater than that figure. This is a withholding tax.
Where, however, nonresident individuals receive income for providing services in Taiwan, and their salary is borne by a foreign employer, that income is subject to Taiwan income tax only if the individual is present in Taiwan for more than 90 days in the tax year (which is the calendar year). In the case of multiple entrances into Taiwan in a tax year, all days of presence must be aggregated to determine the length of presence under the 90-day rule.
 Rental income  
In general, rental income is taxable income. However, if house owners lease their house to persons receiving rental subsidies from the competent authority or other agencies, the competent authority, or house rental service providers providing social housing in accordance with the Housing Act, up to NT$15,000 of rental income per month shall be exempted from income tax. See further [6.7.1]Section 6.7.1[end].
 Capital gains  
Capital gains are generally treated as ordinary income.
Capital gains on the sale of securities are exempt.38 However, capital gains on the sale of unlisted securities (except for securities in high-risk innovative start-up companies incorporated for less than five years) are subject to the AMT (for which, see [3.1.2]Section 3.1.2[end]).39
Special rules apply to capital gains derived from the transfer of land and buildings. For more information, see [6.3.1]Section 6.3.1[end].

6.2.4. Deductions and Allowances 
 Personal exemptions  
For the 2024 tax year, taxpayers are entitled to an exemption in respect of themselves, their spouses and their dependents of NT$97,000 each (NT$92,000 in 2023). Where taxpayers, their spouse, or their lineal ascendants have attained 70 years of age, the exemption amount is increased by 50 percent. The exemption for 2024 is therefore NT$145,500 (NT$138,000 in 2023).
 Deductions  
The following general deductions are available for 2024: 
 a standard deduction of NT$131,000 (NT$124,000 in 2023) for a single person and NT$262,000 (NT$248,000 in 2023) for a married couple filing a joint return; or 
 itemized deductions that are categorized as any charitable contributions, insurance premiums, medical and childbirth expenses, losses from disaster, and mortgage interest.
 
Taxpayers can choose to apply either standard deductions or itemized deductions, but not both.
Special deductions are available in addition to the general deductions listed above. For 2024, these include the following: 
 deductible losses from property transactions, which may be deducted from the gains from property transactions reported in the same year. If the deductible amount exceeds the gains, the difference may be carried forward for three years;
 for salary/wages, the higher of either:
o a standard deduction of up to NT$218,000 (NT$207,000 in 2023); or
o a verifiable deduction for job-specific clothing, tools/materials or training expenses, capped at 3 percent of total salary for each category of expense;
 interest from bank savings — up to NT$270,000 (unchanged from 2023);
 disability allowance — NT$218,000 (NT$207,000 in 2023);
 tuition fees — up to NT$25,000 (unchanged from 2023) for each dependent child;
 pre-school children (below age six years old) — NT$150,000 for the first child, and NT$225,000 for each subsequent child (NT$120,000 per child in 2023); 
 long-term care expenses of taxpayers, spouses and family members (dependents) who qualify as disabled and need long-term care services under guidelines issued by the Ministry of Health and Welfare — NT$120,000 (unchanged from 2023); and
 rental payments — up to NT$180,000 (replacing itemized deductions totaling up to NT$120,000 in 2023). 
 
The special deductions for pre-school children and long-term care expenses are not available to individuals who: 
 after deducting such special deduction, fall within the 20 percent or higher income tax bands (for which, see [6.3.1]Section 6.3.1[end]);
 have income that is equal to, or greater than, the qualifying threshold for the AMT (for which, see [6.2.1]Section 6.2.1[end]); or
 choose to have dividends taxed under Method 2 (for which, see [6.4.1]Section 6.4.1[end]).41
 
 Basic living expense difference  
Where the total basic living expenses, calculated as the basic living expenses for one person (NT$202,000 for 2024) multiplied by the aggregate number of taxpayer, spouse, and dependents in one tax return, are in excess of the sum of exemptions, standard deduction (or itemized deduction), and special deduction for interest from bank savings, disability allowance, tuition fees, pre-school children and long-term care expenses claimed on the return, the difference can be applied as an additional deduction.
 Investment in government-approved high-risk innovative startups  
From November 24, 2017 to December 31, 2029, if a tax resident individual invests more than NT$1 million in cash in a government-approved domestic high-risk innovative startup and holds registered stock issued by the startup for over two years, up to 50 percent of the investment amount (up to a maximum of NT$3 million) can be deducted from the individual's personal income for the year when the holding period of the aforesaid stock reaches two years.43 However, with effect from January 1, 2022, the amount deducted must be included in the individual's basic income for the purpose of determining whether any AMT is payable.44 For more information on the AMT, see [3.1.2]Section 3.1.2[end].
A "high-risk innovative startup" refers to a company that has been set up for less than two years and meets the following conditions: (i) its technology, design or business model is innovative and has the potential for further development; (ii) it may provide solutions for the targeted markets or create demand; and (iii) the developed goods or services may potentially be commercialized.
For individual investors to be eligible for the deduction, the company must obtain approval from the competent authority in advance. To obtain such approval, the company must submit the following documents to the competent authorities: (i) the company's registration document; (ii) its business plan; (iii) its shareholders' register and related information on the shareholding of the investors; and (iv) other related documents as may be required by the competent authorities.
 Investment in unlisted biotech and pharmaceutical companies  
Until December 31, 2031, if individuals invest at least NT$1 million in cash in a qualifying unlisted biotech or pharmaceutical company in a tax year, and hold the newly-issued shares for three years, they can deduct up to 50 percent of the investment amount (capped at NT$5 million per year) from their personal taxable income within two years from the year in which the holding period reaches three years.45
The amount deducted must be included in the individual's basic income for the purpose of determining whether any AMT is payable.46 For more information on the AMT, see [3.1.2]Section 3.1.2[end].
 Rental Income  
An individual can deduct specified necessary expenses from rental income or opt instead for a standard deduction of 43 percent of the annual taxable rental income.
 Special regime for foreign professionals  
In accordance with the Act for the Recruitment and Employment of Foreign Professionals, foreign professionals who meet certain requirements can have 50 percent of the amount of their annual income from salary or wages that exceeds NT$3 million exempted from personal income tax for the first five calendar years starting from the year when they for the first time resided in Taiwan for at least 183 days of the year.
The requirements are as follows: 
 the professional has an "Employment (Work) Permit for Foreign Special Professionals" issued by the Ministry of Labor or by the Ministry of Education, or an "Employment Gold Card" issued by the National Immigration Agency of the Ministry of the Interior;
 the professional has for the first time been approved to reside in Taiwan for the purpose of work;
 the professional has engaged in professional work related to the recognized special expertise in Taiwan; and
 during the five years prior to their employment in professional work or the date when they received the "Employment Gold Card," the professional did not have household registration in Taiwan and was not an individual residing in Taiwan as defined in the Income Tax Act.
 
In addition, if the individual has overseas income, it is excluded from the basic income in determining whether any AMT (see [3.1.2]Section 3.1.2[end]) is payable.

6.3. Main Rates and Bands 

6.3.1. Individual Tax Rates 
 Income tax rates  
The taxable income bands and progressive income tax rates for 2024 are as follows: 
 up to NT$590,000 — 5 percent;
 from NT$590,001 to NT$1,330,000 — 12 percent;
 from NT$1,330,001 to NT$2,660,000 — 20 percent;
 from NT$2,660,001 to NT$4,980,000 — 30 percent; and
 above NT$4,980,000 — 40 percent.47
 
 Capital gains rates on real property transfers (land and buildings)  
Capital gains tax is applicable on the sale of real property, including pre-sale homes (i.e., homes sold while under construction), acquired on or after January 1, 2016. Different rates apply depending on whether the seller is a resident or nonresident individual and also on the length of time the seller has held the property.48
The following rates apply: 
 Sale by resident individual:
o held for two years or less — 45 percent;
o held for more than two years and up to five years — 35 percent;
o held for more than five years and up to ten years — 20 percent;
o held for more than ten years — 15 percent;
 Sale by nonresident individual:
o held for two years or less — 45 percent; and
o held for more than two years — 35 percent.
 
The above rates also apply to gains from direct or indirect share transfers by individuals that hold more than 50 percent of the shares of a resident or nonresident company, where more than 50 percent of the value of the shares is made up of real property located in Taiwan.49 Listed and over-the-counter shares are excluded.
Concessionary rates apply to private-use homes occupied by taxpayers as a residence for more than six years, and which have been registered as households. The concessionary rates are as follows: 
 capital gains up to NT$4 million — exempt from tax; and
 capital gains in excess of NT$4 million — 10 percent.50
 
A taxpayer can only utilize these concessionary rates once every six years. A refund may be claimed in certain cases where the same real property is repurchased.
Certain agricultural land is also exempt from this capital gains tax.
Certain involuntary sales are taxed at a rate of 20 percent, where the holding period of the property is less than five years.51
A different taxation regime applies to transfers of (i) real property acquired on or before January 1, 2014, and (ii) real property acquired on or after that date but before January 1, 2016 and held for over two years.

6.3.2. Individual Returns, Filing Dates, and Payment 
Taiwan tax residents are required to file an income tax return in May each year for their Taiwan-sourced income received in the previous calendar year. In general, husbands and wives are required to file joint returns. Family members can be included in the return provided that they meet certain criteria.
Personal income tax returns are due in the month of May each year (from May 1 to May 31). Taiwan tax residents should include all of their Taiwan-sourced income together with all of their spouse's, and dependent(s)' Taiwan-sourced income (unless tax exemptions or reductions are otherwise provided in the tax law) into the consolidated income tax return.
Individuals can choose to file their income tax returns on paper or electronically.
The deadline for filing an individual income tax return is May 31 and cannot be extended. However, if May 31 falls on a Sunday or a Saturday, the return due date can be extended to June 1 or June 2. Individuals are not required to make deposits of estimated liability.

6.4. Dividends 

6.4.1. Domestic Corporations 
Dividends distributed by domestic corporations to resident shareholders are taxed, at the option of the taxpayer, in accordance with the more beneficial of the following two methods: 
 Method 1 — the resident individual's dividend income is included in general taxable income and taxed accordingly (see [6.3.1]Section 6.3.1[end]), but 8.5 percent of the dividend is deductible up to a maximum credit of NT$80,000 per household; and
 Method 2 — the resident individual's dividend income is calculated separately at a flat rate of 28 percent with no allowances or deductions.52
 
Subject to treaty, dividends paid to nonresident individuals are subject to withholding tax at the rate of 21 percent.

6.4.2. Foreign Corporations 
Taiwan individual tax residents are subject to Taiwan income tax on their Taiwan-sourced income only. Hence receipt of dividends from a foreign corporation is not subject to Taiwan income tax. However, they should include such dividend income in their basic income in determining the amount of AMT, unless the total amount of overseas income is below NT$1 million or total basic income is less than NT$7.5 million.
For more information about the AMT, see [3.1.2]Section 3.1.2[end].
The withholding tax paid on the dividends can be applied as a tax credit against the amount of AMT, up to the amount of the AMT that has been increased due to such dividends.

6.5. Interest 

6.5.1. Domestic Borrowers 
Taiwan tax residents are required to include their interest from bank deposits (for an amount exceeding NT$270,000) or bonds as part of their taxable income in calculating the income tax payable, but may apply the income tax that the interest payer withheld upon payment as a tax credit against the income tax payable.
Depending on the types of investment, some types of interest are required to be included in the recipient's taxable income and taxed at the normal progressive rates (for which, see [6.3.1]Section 6.3.1[end]), while some types of interest are subject to a separate rate. For example, interest from short-term commercial papers, corporate bonds, government bonds, and financial bonds, as well as beneficial securities or asset-backed securities are subject to 10 percent withholding income tax, and need not be included as part of one's taxable income.
The interest payer (bank or bond issuer) is required to withhold income tax at the rate of 10 percent upon paying interest to an individual who is a Taiwan tax resident. The recipients should report all of the interest generated from bank accounts in their income tax return, but pays income tax at the normal progressive rates only on the interest in excess of NT$270,000 (interest from bank savings up to that amount is deductible). The withholding tax can be applied as a tax credit against the income tax payable. As to the interest generated from bonds, after the bond issuer withholds 10 percent income tax from the payment, the recipients need not report it in their income tax return.

6.5.2. Foreign Borrowers 
Taiwan individual tax residents are subject to Taiwan income tax on their Taiwan-sourced income only. Hence, receipt of foreign interest from a foreign corporation is not subject to Taiwan income tax. However, such interest should be included in the recipient's basic income in determining the amount of AMT, unless the total amount of overseas income is below NT$1 million or total basic income is less than NT$7.5 million.
The withholding tax paid on the interest can be applied as a tax credit against the amount of AMT, up to the amount of the AMT that has been increased due to such interest.

6.6. Social Security/National Insurance Payments 

6.6.1. Employer Tax or Contribution 
An employer is required to enroll all employees into the national labor insurance, employment insurance, national health insurance and labor pension schemes.
 National health insurance  
Basic Premium: The national health insurance premiums are payable by the employee (30 percent), the employer (60 percent) and the government (10 percent). The premium rate is 5.17 percent of monthly insured salary, capped at NT$219,500.
Supplementary Premium: Employees and employers are subject to a supplementary premium of 2.11 percent under conditions that differ between employees and employers.
 Labor insurance  
The labor insurance premiums are payable by the employee (20 percent), the employer (70 percent) and the government (10 percent). The premium rate is 11 percent of monthly insured salary, capped at NT$45,800.
 Employment insurance  
The employment insurance premiums are payable by the employee (20 percent), the employer (70 percent) and the government (10 percent). The premium rate is 1 percent of monthly insured salary.
 Labor pension  
Labor pension contributions are payable by the employer at a rate of at least 6 percent of monthly insured salary, capped at NT$150,000.

6.6.2. Employee Tax or Contribution 
For employee contributions to the national health insurance, labor insurance and employment insurance schemes, see [6.6.1]Section 6.6.1[end].

6.6.3. Employee Tax Collection Mechanism 
Employee contributions are collected by the employer through withholding from salary.

6.7. Royalties and Rents 

6.7.1. Domestic Licensors 
Taxation — Resident individuals are generally subject to Taiwan tax on rents and royalties from the domestic use of property. Resident individuals are not subject to Taiwan tax on rents and royalties from the foreign use of property. However, such royalties or rent should be included in the recipient's basic income in determining the amount of AMT, unless the total amount of overseas income is below NT$1 million or total basic income is less than NT$7.5 million.
Rate — Rents and royalties are subject to tax at the individual's standard rate (maximum 40 percent).
Withholding tax — Domestic corporate payers of royalties and rent must withhold tax at the rate of 10 percent and remit the same to the tax authorities from domestic use of property. The resident individual recipients can apply the withholding tax as a tax credit to against their tax payable in the annual tax return.
For exemptions and deductions relating to rental income, see [6.2.3]Section 6.2.3[end] and [6.2.4]Section 6.2.4[end].

6.7.2. Foreign Licensors 
Taxation — Royalty or rent received by foreign individuals for domestic use of property by other persons within Taiwan is deemed Taiwan-sourced income, subject to Taiwan income tax.
Rate — Royalty or rent is subject to the standard rate (20 percent) of income tax in Taiwan, unless otherwise exempt or reduced under laws or tax treaties.
Withholding tax — Domestic corporate payers of royalties or rent must withhold tax at the rate of 20 percent and remit the same to the tax authorities from domestic use of property, unless otherwise exempt or reduced under laws or tax treaties, and nonresidents are not liable to additional tax on royalties or rent.

7. Transfer Pricing Policies 

7.1. Application 
Transfer pricing rules apply to transactions between a Taiwan entity and its affiliate(s), regardless of whether the affiliate(s) is within or outside Taiwan.
Taiwan adopts the arm's-length principle, which applies to all transactions conducted between/among related parties ("controlled transactions"), regardless of the industry concerned.53

7.2. Permissible Pricing Methods 
Taiwan allows the transfer pricing methods in the OECD Transfer Pricing Guidelines.54

7.3. Penalties for Improper Pricing 
Any omission or underreporting of income taxable under the improper transfer pricing should be subject to a fine of no more than twice the amount of the tax evaded. Taiwan tax authorities do undertake transfer pricing audits and may levy penalties where transfer pricing guidelines are not followed.55

7.4. Advance Rulings or Pricing Agreements 
Advance rulings (including APAs) are available. Taiwan tax authorities will negotiate bilateral agreements with tax authorities in other jurisdictions.56

7.5. Documentation 
 Transfer Pricing Report (Local File)  
If a Taiwan company engages in a controlled transaction with any affiliate, it must prepare a transfer pricing report, and have the report available when filing its income tax return. The transfer pricing report must be submitted to the tax authorities within one month of receiving the request notice issued by the tax authorities. The reporting requirement does not apply to companies meeting certain conditions, primarily those whose total annual revenue is less than NT$300 million or whose controlled transactions have an annual value of less than NT$200 million.57
The content of the required documentation corresponds to that required in the "local file" by Action 13 of the OECD/G20 BEPs project. This includes a comprehensive business overview, a description of the group organization and management structure, summaries of the controlled transactions, a controlled transaction analysis, statements and consolidated reports of the affiliates and other materials as required under the Company Act, and other documents in relation to related parties or controlled transactions which may affect pricing.58
 Master File  
If a Taiwan company is a constituent entity (CE) of a multinational enterprise (MNE) group, it must prepare a master file, and have the master file available when filing its income tax return. The master file must be submitted to the tax authorities within one year after the end of the fiscal year. This reporting requirement applies to CEs whose net operating revenue and nonoperating revenue in a fiscal year is at least NT$3 billion, and whose aggregate cross-border controlled transactions in a fiscal year totaled at least NT$1.5 billion (the master file reporting threshold). If two or more CEs of the same group are required to file in Taiwan, the group may designate one of the CEs to submit the master file on behalf of the group.59
The master file must include the MNE's organizational structure, a general description of the MNE's businesses, the MNE group's intangibles, the MNE's intercompany financing activities and the MNE group's financial and tax positions.60
 Country-by-Country (CbC) Report  
A Taiwan company that is the ultimate parent entity (UPE) of an MNE group with an annual consolidated group revenue of at least NT$27 billion in the preceding year (the CbC reporting threshold) must, within one year after the end of the relevant fiscal year, submit a country-by-country (CbC) report to the tax authorities. If a Taiwan company is a CE of an MNE group whose group revenue meets the CbC reporting threshold, but whose UPE is resident outside Taiwan, the CE must submit the CbC report if one of the following conditions applies: 
 the UPE is not required to file a CbC report in the tax jurisdiction where it is resident;
 the UPE is required to file a CbC report in the tax jurisdiction where it is resident, but—
o there is no qualifying competent authority agreement (CAA) in place between Taiwan and the UPE's jurisdiction of residence; or
o there is a CAA in place between Taiwan and the UPE's jurisdiction of residence, but the tax authorities fail to exchange the CbC report; or
 the CE is designated as the MNE group's surrogate parent entity (SPE).
 
Where two or more CEs of the MNE group are resident in Taiwan, the group may designate one of them to submit the CbC report.62
The CbC reporting requirement does not apply to a Taiwan CE whose UPE is resident in a tax jurisdiction other than Taiwan and: 
 that other jurisdiction—
o has a BEPS-compliant CbC regime, and the UPE is exempt from the CbC reporting requirements under that regime; or
o has no CbC regime, but a designated SPE in a third tax jurisdiction, which does have a BEPS-compliant CbC regime, is exempt under that regime; or
o has no CbC regime and there is no SPE, but the group revenue of the MNE group does not meet the Taiwan CbC reporting threshold; or
 the CE is exempt from preparing a master file in Taiwan because it does not meet the master file reporting threshold.63
 
A CbC report must be prepared in accordance with the format provided by the tax authorities. The report should contain: 
 aggregate information relating to the amount of revenue, profit (loss) before income tax, income tax paid, income tax accrued, stated capital, accumulated earnings, number of employees and tangible assets other than cash or cash equivalents with regard to each jurisdiction in which the MNE group operates;
 an identification of each CE of the MNE group, setting out its jurisdiction of tax residence or, if different, the tax jurisdiction under which each CE is organized or incorporated, and the nature of each CE's main business activity or activities; and
 a description of any other activity in which such a CE is engaged.64
 
 Sanctions for Noncompliance  
Failure to comply with any of the above documentation requirements may result in a penalty of between NT$3,000 and NT$30,000.65

8. Anti-Avoidance Provisions 

8.1. General Anti-Avoidance Provisions 
Article 47 of the Enterprise Mergers and Acquisitions Act prescribes that, if there is an act between a company and its subsidiary or between a company or its subsidiary and a Taiwan or foreign individual or entity, to evade or reduce tax obligations through any irregular transactional arrangements, or to evade or unlawfully reduce tax obligations of another or itself/himself/herself through an acquisition of shares, transfer of property or any other fraudulent arrangements, the tax authorities may, with the approval of the MOF, make adjustment(s) based on regular transactional practices and/or verified information in order to assess the correct income and tax payable.
Article 7 of the Taxpayer Rights Protection Act sets out the substance-over-formality principle. Under this article, the tax authorities have the power to impose a late payment penalty (equal to 15 percent of the shortfall) and daily interest for tax avoidance.66
The tax authorities may not impose additional penalties for tax evasion, except in the case where taxpayers conceal, make false and misleading presentation, or provide incorrect information to material items when making filings or being investigated, which results in the tax authority making an inaccurate decision.67 In practice, submitting a self-disclosure letter with the tax return may prevent the authorities from imposing penalties.
There is no requirement to report aggressive or questionable tax positions to the tax authorities.

8.2. Thin Capitalization/Other Interest Deductibility Rules 
Taiwan has a thin capitalization rule, which is prescribed in Article 43-2 of the Income Tax Act. If the ratio of a company's debts (to its related party) to its equity exceeds a certain ratio, the interest expense arising out of the portion of the debts exceeding said ratio is not deductible, except for financial institutions (including banks, cooperatives, financial holding companies, bills finance companies, insurance companies, and securities firms). The MOF, by referring to international practices, has set a safe harbor debt-equity ratio of 3:1.
If the interest rate on a loan extended by a nonfinancial institution exceeds the highest rate set by the MOF (15.6 percent per annum or 1.3 percent per month for 2024), the portion of the interest payment exceeding such rate cannot be declared as a tax-deductible expense. In addition, if a company borrows money and pays interest thereon, while at the same time extends a loan without charging interest or the interest from extending such loan is lower than the amount of interest expense, the amount of interest expense cannot be declared as a deductible. Moreover, Taiwan tax law provides for the capitalization of interest on: (1) a loan for a land purchase and (2) a loan for a construction project.

8.3. Controlled Foreign Company (CFC) Rules 
The CFC rules are designed to prevent Taiwan tax residents from avoiding taxation by establishing CFCs in low-tax jurisdictions. A low-tax jurisdiction for these purposes is defined as a jurisdiction:
 whose tax rate is not more than 70 percent of the tax rate in Taiwan; and/or
 which imposes taxes on a territorial basis, and either does not impose taxes on offshore income or only imposes taxes on such income upon remittance.

Subject to anti-abuse provisions, the CFC rules do not apply when the CFC carries out "substantial operating activities" or the CFC's current year earnings are less than NT$7 million. Where the CFC rules do apply, there are separate rules for enterprises and individuals. 
For Taiwan tax-resident enterprises, a foreign enterprise registered in a low-tax jurisdiction is considered a CFC if the tax-resident enterprise and its related parties directly or indirectly hold at least 50 percent of the shares or capital of the foreign enterprise ("equity control") or have a significant influence on the operations of the foreign enterprise ("substantial control"). Taxable CFC income must be declared by and included in taxable income of the tax-resident enterprise, and taxed at the standard corporate income tax rate in Taiwan (see [3.1.1]Section 3.1.1[end]).
For Taiwan tax-resident individuals, a foreign enterprise is considered a CFC if the individual and their related parties have equity control or substantial control of the foreign enterprise. If the individual's direct shareholding in the CFC, either in their own name or combined with their spouse and relatives within the second degree of kinship, is at least 10 percent of the shares or capital of the CFC in total, the individual is required to calculate their share of the CFC business income in proportion to their shareholding. The individual's taxable CFC income must be included, together with other overseas income, in their taxable income for the relevant year for AMT purposes (see [3.1.2]Section 3.1.2[end]), unless their total annual overseas income is less than NT$1 million. 
Generally, taxable CFC income is calculated by the Taiwan tax resident in accordance with the following formula: 
 (CFC's current year earnings minus any legal reserve required by the CFC's jurisdiction minus the losses of the past year assessed by the tax authority) multiplied by the tax resident's direct holding ratio multiplied by the holding period
 
Planning Point: For these purposes, the Taiwanese tax authorities have clarified that, when applying the NT$7 million exemption threshold, the combined earnings of all CFCs must be taken into account, as shown in the following example:
A Taiwan tax resident directly holds three CFCs as follows: 
 CFC A: current year loss of NT$2 million;
 CFC B: current year profit of NT$5 million;
 CFC C: current year profit of NT$5 million.
 
Although each CFC's current year earnings are below the NT$7 million exemption threshold, the combined current year net earnings of all CFCs controlled by the Taiwan tax resident (i.e., NT$8 million) exceed that threshold, and therefore the CFC rules apply.

9. Other Taxes 

9.1. Payroll Taxes 
There is no specific tax on payroll in Taiwan.

9.2. Capital Taxes (Capital Duties) 
There are no capital duties in Taiwan.

9.3. Property Taxes 

9.3.1. Transfer Taxes, Including Real Property Transactions 
 Land Value Increment Tax  
Gains on the transfers of land acquired: 
 on or before January 1, 2014; and
 on or after January 2, 2014 and before January 1, 2016 and held for over two years.
 
are exempt from income tax but are subject to land value increment tax. The land value increment tax rate is 20 percent, 30 percent or 40 percent of the increment in government-assessed value during the period from the date of purchase to the date of sale of the land.
For more information on the taxation of capital gains on real property transfers, see [4.1]Section 4.1[end] and [6.3.1]Section 6.3.1[end].
 Deed Tax  
The purchaser of real property is subject to deed tax at 6 percent of the building's government-assessed value, and stamp tax at 0.1 percent of the sum of the government-assessed value of the land and the building.

9.3.2. Real Property Taxes 
Owners of buildings are subject to annual building tax at rates ranging from 1 percent to 5 percent of the government-assessed value of the building, and owners of land are subject to annual land value tax at rates ranging from 1 percent to 5.5 percent of the government-assessed value of the land. Land categorized under certain types of use are subject to one of the following specified land value tax rates:71 
 if the land is being occupied by taxpayers as a residence and meets certain other requirements, the tax rate is 0.2 percent;
 if the land is reserved for public facilities under urban planning, but is still built on and used during the reserve period, the tax rate is 0.6 percent; and
 if the land is owned by the government, or is used for industrial or mining purposes, for operating a gas station or public parking lot, for a private park, zoo, or sports stadium, for a temple, church, or government-designated scenic spot or historical site, the tax rate is 1 percent.

9.3.3. Taxes on Movable Property 
Owners or users of any form of transportation equipment subject to licensing are required to pay the vehicle license tax. Completely electric-operated vehicles (cars and motorcycles) are exempt from the vehicle license tax until December 31, 2025.
For certain luxury goods and services, a 10 percent tax72 is imposed on: (1) the manufacturer for the selling prices of goods upon dispatch from the factory; (2) importers on the sum of the after-tax price of the goods plus import tax; and (3) the sellers for the selling prices in all other circumstances. These goods and services include: (1) any private sedan, airplane, helicopter, or super-light vehicle with a unit price of NT$3 million or more; (2) any yacht with a full length of 30.48 meters (i.e., 100 feet) or more; (3) any item of furniture with a selling price or taxable value of NT$0.5 million or more; (4) any turtle shell, hawksbill, coral, ivory, fur, and products made of any of the aforementioned items with a selling price or taxable value of NT$0.5 million or more; and (5) nonrefundable memberships with a selling price of NT$0.5 million or more (except for refundable deposits).

9.3.4. Fixed Asset Taxes 
There is no special fixed asset tax in Taiwan.

9.4. Miscellaneous Taxes 
 Customs or Import Duties  
All imported goods except those exempted by the Customs Act and related law are subject to customs duties on an ad valorem basis.
 Excise Taxes  
An excise tax is levied on specified taxable commodities at the time such goods are dispatched from the factory or are imported on an ad valorem or specific basis on certain tax rates or tax amounts.
 Inheritance and Estate Taxes  
Estate tax is payable on the estate of a deceased who was a Taiwan citizen and who had resided in Taiwan constantly, regardless of whether the estate is located within or outside Taiwan. In a case where the deceased was a Taiwan citizen but did not reside in Taiwan constantly, or was not a Taiwan citizen, estate tax is payable only on the estate located within Taiwan.
Estate tax is payable at the following rates on the net amount of an estate after subtracting any and all deductions and exemptions: 
 for estates with a net value up to NT$50 million, the tax rate is 10 percent;
 for estates with a net value over NT$50 million, but not more than NT$100 million, the tax rate for the incremental portion is 15 percent; and
 for estates with a net value over NT$100 million, the tax rate for the incremental portion is 20 percent.
 
 Gift Taxes  
Gift tax is payable on any gift from a donor who is a Taiwan citizen and resides in Taiwan constantly, regardless of whether the gift is located within or outside of Taiwan before being given. With respect to a gift from a donor who is a Taiwan citizen but resides outside of Taiwan constantly or a non-Taiwan citizen, gift tax is payable only if it is located within Taiwan before being given.
Gift tax is payable at the following rates on the net amount of a gift after subtracting any and all deductions and exemptions: 
 for gifts up to NT$25 million, the tax rate is 10 percent;
 for gifts over NT$25 million, but not more than NT$50 million, the tax rate for the incremental portion is 15 percent; and
 for gifts over NT$50 million, the tax rate for the incremental portion is 20 percent.
 
 Stamp Tax  
Stamp tax is imposed on certain documents, including receipts of monetary payments, deeds for sale of movables, work-for-hire agreements, and transfer of real estate agreements that are executed in Taiwan.
 Securities Transaction Tax (STT)  
Trading in shares and share certificates embodying the right to shares issued by Taiwan companies is subject to 0.3 percent STT on the selling price (reduced to 0.15 percent from April 28, 2017 to December 31, 2024 for day-trading transactions). Trading in corporate bonds and other securities issued by Taiwan companies and approved by the government is subject to 0.1 percent STT on the selling price.73 The seller is the taxpayer of the STT payable; however, the buyer is the statutory tax withholder.
Trading in bank debentures and corporate bonds is exempt from STT until December 31, 2026.74
Subject to conditions, the trading of warrants is subject to a reduced STT rate of 0.1 percent, from November 10, 2023 through November 9, 2028.75
Note that a 0.1 percent STT applies to virtual currencies that are of a similar nature to securities approved under the Securities Exchange Act. Ordinarily, the securities registration rules do not apply to issued virtual currencies of less than NT$30 million; however, the MOF clarified in April 2020 that the STT applies regardless of the NT$30 million threshold.
 Value Added Tax (VAT)/Goods and Services Tax (GST)  
For VAT/GST and similar taxes, see the VAT Navigator.

10. Special Industries 

10.1. Oil, Gas and Mineral Extraction 
Taiwan does not have a special tax scheme governing businesses that extract oil, gas, or other minerals.

10.2. Banking and Finance 
Taiwan does not have a special income tax regime for businesses operating in the banking and finance sector.

11. About the Authors 
Frank Lin
 Lee & Li Attorneys-at-Law  
 Last reviewed/updated August 6, 2024