May 1, 2006
Law Draft Revision Calls for Uniform Tax Rate for Foreign Investors
On April 24, the Legislative Yuan Finance Committee passed the first reading of revised tax regulations that stipulate foreign businesses in Taiwan pay a uniform tax at a withholding rate of 20%.
The new regulation would phase out the differing tax rates for foreign companies depending on whether or not they operate through a branch subsidiary or a local agent.
Current regulations hold that foreign companies that have a branch or operating through a local agent in Taiwan are taxed at a rate of 25% on all income, while foreign companies that do not have a branch or operate through a local agent are taxed at a rate of 20%.
Under the revisions proposed by the Ministry of Finance, a company branch in Taiwan can no longer group its revenue with that of its parent company outside of Taiwan, and a 20% income tax rate would apply to all foreign companies in all situations.
(Economic Daily News)
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