Posted By Romain Ponsot on Oct 6, 1907 in Doing Business

Date de publication : 06-10-1907

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The following information are for the sole purpose  of providing a general overview of  the local taxation of the Corporate tax aspects of the country. In any case, the information provided below cannot be considered as comprehensive or deemed to constitute specific legal advice.

Yes we tax in Taiwan

Flash News

Specific tax rules: In case of Shareholder loan, the rate of the loan should be determined by the Bank Central of Taiwan.

New tax reform: No specific information

New tax treaties/agreements: No specific information

Local tax advisors

No specific information on the local tax advisors.

Useful links

Website Tax administration: Click here

Permanent Establishment

There is no definition of Permanent Establishment but instead there is a “fixed place of business” or a “business agent”.

Resident companies are taxed on their worldwide income (« worldwide principle »). However, non-resident companies are only taxed on their revenues derived from Taiwan sources (« source principle »).

Entities are considered to be resident for tax purposes in Taiwan if their place of registration is in Taiwan.

Note: the definitions of permanent establishment and place of residence are subject to the relevant provisions of any applicable double tax treaty, if any.

Corporate Income Tax

The general CIT tax rate is 17%.

Note: there is an alternative minimum tax

Non-taxable income includes the following:

  • Dividends received from qualifying participations
  • Certain capital gains deriving from qualifying participations
  • Profits from a permanent establishment abroad

Non-deductible expenses includes the following:

  • Dividends benefiting from the participation exemption
  • Interest in excess of the thin-capitalization threshold
  • Fines and penalties

Carry forward: Yes 10 years, but some restrictions may apply.

Carry back: No

Companies should submit a provisional tax return in September of the current fiscal year.

Annual tax returns are established by the company on a self-assessment system.

Whithholding Taxes (payment to foreign companies)

The local tax rates in Taiwan are the following, subject to the provisions of an applicable double tax treaty, if any.

There is 0% WHT on the profits paid from a branch to its foreign head office.

The general rate of WHT on dividends is 20% of the gross amount.

The general rate of WHT on interest is 20%.

Note: In case of Shareholder loan, the rate of the loan should be determined by the Bank Central of Taiwan.

The general rate of WHT on Royalties is 20%.

The general rate of WHT on management fees is 20%.

The general rate of WHT on technical services is 20%.

Capital gains

Generally, capital gains are taxed under the regular CIT as general income.

Note: capital gains deriving from qualifying participations are exempt under the participation exemption.


Standard VAT tax rate is 5%

Zero-rated supplies include, subject to certain conditions:

  • exports of goods;
  • Services related to zero-rated goods;
  • International passenger transportation;

Exempt supplies include, subject to certain conditions:

  • Training and education

Note: exempt transactions differ from zero-rated transactions in that the input VAT associated with exempt transactions is not deductible.

In case where for a tax period, Input VAT exceeds Output VAT, certain non-resident companies (which are not required to register and incur Taiwan-VAT in the course of their business activities in Taiwan) may apply for a refund under the same conditions than resident companies.

Refunds are subject to the reciprocity principle, which means that Taiwan only refunds VAT to foreign companies in countries that offer similar refunds to Taiwan companies.

No other specific information of VAT in Taiwan.


The general statute of limitation is 5 years starting at the end of the year in which the tax return had to be filed.

The statute of limitation could be extended to 7 years for negligent tax fraud and for wilful tax fraud.

There is a foreign exchange control in Taiwan. The repatriation of dividends and profits of any kind may require approval.

There are thin capitalization rules in Taiwan. The interest derived from loans between related parties may not be deductible in case where interest exceeds some ratios (3 times the taxpayer’s net equity).

Note: In case of Shareholder loan, the rate of the loan should be determined by the Bank Central of Taiwan.

Do not hesitate to share your experience in Taiwan with us in the comments below. Any comments are welcome !

Romain Ponsot
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