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Taiwan

Taxes

If you are willing to incorporate in Taiwan, this article explains the tax laws in Taiwan for a LLC, which is the most common company structure in Taiwan.

A Taiwan resident company is liable to tax on its worldwide income, irrespective of source. The predominant estimated tax rate for offshore income, from our research, but seek professional advice, is 17%. Taiwan does not have known exemptions to remit income earned outside its borders. Taxes are lower than average in Taiwan because the highest corporation tax rate is 17%. Taxable income up to TWD 120,000 may be tax exempt. Undistributed profits may be subject to a surtax of 10%. Taiwan ranks 59th overall with regards to CIT globally.

The valued added tax rate is 5.00%, that ranks Taiwan as 27th when compared to value added tax rate worldwide. Certain goods and services from specified industries are subject to a Gross Business Receipts Tax at a rate from 1% to 5%. Certain commodities are subject to Comomodity Tax from 8% to 30%. In terms of other taxation, an employer will contribute 17.81% to the equivalent of a social security fund and an employee will contribute 4.49%. The overall complexity of the tax system is low. This is measured by average time to comply with a country's labor tax requirements is as it is 27hours. Contributing to this is the number of yearly labor tax payments, which is 5 in TW.

Thin cap standards are in effect. This refers to any sort of restrictions on given company with respect todebt-to-asset ratios.
Dividends received by a resident entity from another resident entity are not included in taxable income. Dividends received from foreign entities are taxable, but there is usually a tax credit for foreign tax paid limited to Taiwanese tax rates. Dividends are payments of earnings of the business, voted by the board of directors, to a particular class of shareholders. Dividends can be one of the following stock, cash, or property.
Capital Gains are usually taxed as ordinary income. However, those from the disposal of Taiwanese marketable securities and futures are treated separately and subject to Income Basic Tax at a flat rate of 12%. If securities are held at least 3 years, a 50% exemption may apply. Securities transactions are subject to 0.3% on the gross proceeds. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.

The interest withholding tax rate is estimated at 20%. This should be interpreted that the taxman expects LLC's to pay tax at 20% of interest payments remitted abroad. Certain interest payments may be subject to a reduced rate of 15%. The dividends withholding tax rate is 20%. This should be interpreted that the tax authorities expects companies to automatically withhold 20% of dividends paid to non-residents. Royalties are subject to a withholding tax of 20%. Which means that a resident entity should withhold 20% of its payments on royalties to non-residents. Withholding tax rates may be reduced under a tax treaty.
There is no known tax on wealth in Taiwan. There are inheritance, transfer and real property taxes in Taiwan. There are frequently implemented credits for innovation spend that include breaks on taxation in this country.

The above is not tax or legal advice for your particular circumstances. We are able to to reference you to a lawyer in Taiwan who can give you an answer. Ready to get started? Click the free consultation button above or press incorporate now if you are in a hurry.

Country details

Taiwan
TWD
Taipei
Asia
Chinese (Taiwan), zh, nan, hak
22,894,384

Tax treaties

Country Type Date Signed
Former Yugoslav Republic of Macedonia DTC  1999-06-09
Denmark DTC  2005-08-30
Netherlands DTC  2001-02-27
Israel DTC  2009-12-18
Senegal DTC  2000-01-20
Slovakia DTC  2011-08-10
Luxembourg DTC  2011-12-19
South Africa DTC  1994-02-14
Hungary DTC  2010-05-19
Indonesia DTC  1995-03-01
Belgium DTC  2004-10-13
Switzerland DTC  2011-07-14
Singapore DTC  1981-12-30
Germany DTC  2011-12-28
New Zealand DTC  1996-12-11
India DTC  2011-07-12

Tax treaties Map

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