Page 31 - 2024 BRAVO! TAIWAN_en

A Transparent, Friendly Tax System

Much like the tax systems in Europe and the United
States, Taiwan has a separate tax law for each type of Taiwan Tax System
tax. Tax laws are clearly defined, and filing requirements
are relatively simple and straightforward. Taiwan has Income Tax, Business Tax, Commodity
Tax, Customs Duties, Estate Tax,
concluded 35 comprehensive tax agreements that are National Gift Tax, Securities Transaction Tax,
designed to encourage cross-border investment and Taxes Futures Transaction Tax, Tobacco and
economic activities. After Taiwan joined the WTO in Wine Tax, Specifically Selected Goods
2002, it gradually began to reduce the average nominal and Services Tax
and effective tariff rates for customs duties in order Advantageous Environment
to meet WTO standards. The Taiwan tax system is Land Value Tax, Land Value Increment
characterized by its friendly environment, open and Local Tax, House Tax, Agricultural Land Tax,
transparent collection and auditing procedures, and Taxes Deed Tax, Amusement Tax, Stamp Tax,
reliable taxpayer protection. Vehicle License Tax

Profit-Seeking Enterprise Income Tax on the differential tax rates for the holding period
and then reported and paid on a consolidated basis
A profit-seeking enterprise having its head office in (income earned by profit-seeking enterprises on the
Taiwan (including a subsidiary of a foreign company) first transaction of a newly completed building shall
is subject to profit-seeking enterprise income tax on its be included into the profit-seeking enterprise's income
worldwide income. A foreign tax credit is available for and taxed at a rate of 20%); income from the actual
income tax paid in other countries on income derived transferal of a presale house and its building location
from outside Taiwan in accordance with the tax act through shares or capital also became subject to
of the source country of that income. The credit may taxation. The tax rates for houses acquired after January
be used to offset the foreign tax paid against the 1, 2016 and transferred after July 1, 2021 are as follows:
enterprise's Taiwan income tax liability, but the credit
may not exceed the tax liability that would result if the Head Office in the Territory of Head Office outside
the Territory of the
foreign-source income were added to the Taiwan taxable the Republic of China Republic of China
income and taxed at the applicable domestic rate. Tax Tax
Time of Ownership Rate Time of Ownership Rate
A profit-seeking enterprise whose head office is 2 year or less 45Ĉ 2 year or less 45%
outside Taiwan (such as a Taiwan branch of a foreign Between 2 and 5 years 35Ĉ
company) is subject to profit-seeking enterprise income More than 5 years 20Ĉ More than 2 year 35%
tax on its Taiwan-source income, in accordance with Houses transferred
the Income Tax Act. because of non-voluntary
causes, built in partnership
2024 Profit-Seeking Enterprise with other profit-seeking
Income Tax Rates enterprises, or acquired
through participation
Taxable Income Tax Rate in urban renewal 20Ĉ
Bracket (NT$) or reconstruction in
Up to 120,000 None accordance with relevant
acts or statutes that have
20% tax shall be levied on total taxable been held for a period of
income; however, tax payable may Ù5 years
Over 120,000
not exceed half the amount of taxable
income on NT$120,000.
¾ Alternative Minimum Tax
¾ House and Land Transaction Income Tax Profit-seeking businesses are required to include tax
System reductions and deductions, and income from securities
Enacted on January 1, 2016, the house and land and futures transactions, in their alternative minimum
transaction income tax system declares that income tax calculation. Since 2013, 50% of capital gains from
earned by profit-seeking enterprises from house transactions of shares held for at least three years by
and land transactions shall be included in the profit- a profit-seeking enterprise (after allowance for losses
seeking enterprise's income and taxed at a rate of from share transactions) have been tax exempt. In
20% (profit-seeking enterprises having its head office Taiwan, however, the alternative minimum tax does not
located outside the territory of the Republic of China apply to businesses without a fixed place of business
shall be taxed at a rate of 45% or 35% depending on or to agents for profit-seeking enterprises.
the holding period). Starting from July 1, 2021, house Basic Tax Amount Formula
and land transaction incomes earned by profit-seeking
enterprises' were handled similarly to Basic tax amount = ([taxable income as described in the
incomes earned by individuals: taxes Income Tax Act + exempt income] –
are computed separately based NT$600,000) X 12%

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