Country Trading Profiles Taiwan - Taxes

Tax Rates

Nature of the tax: VAT.
Tax rate: The VAT rate is 5% flat.
Reduced tax rate: The tax rate that applies to banks, insurance companies, trust and investment companies, securities traders, futures traders, bills finance companies, and pawnshops (except reinsurance premium income, for which the rate is 1%) is 2%. Export sales and export-related services are subject to zero tax rate.
More information on Invest in Taiwan (investment guide).
Other consumption taxes: Special Business tax, etc. More information in the 2009 PKF guide on Taiwan.

Corporate tax	17%
Surtax	A 10% surtax is imposed on undistributed profits.

Tax rate for foreign companies: Resident and non-resident companies are charged in the same way concerning taxation. They're charged on worldwide income generated in Taiwan. If a person resides in Taiwan less than 90 days in a year, the tax rate will be 20%.
Over 90 days, the tax rate is the normal tax rate for local residents, no matter whether Taiwanese or foreigners.
Capital gains taxation: Capital gains are taxed in the same way as ordinary income.
Main allowable deductions and tax credit: Consult the PKF 2009 Tax guide.
Other corporate taxes: Real Property Tax (Land Value Tax) of 1 to 5.5%; Deed Tax is imposed on the transfer of real estate at tax rates varying from 2% to 6%.

Allowable deductions and tax credit: Medical care and insurance allowances, Losses of goods due to natural disasters and Loans interests paid for the purchase of the main home are often deductible. Non-residentsare not entitled to personal exemptions or deductions.
For additional information consult the 2009 Taiwan Tax Guide of PKF.
Special expatriate tax regime: For non-residents, income tax is computed on a gross basis and tax is collected via withholding, at a progressive rate of up to 40%.

Countries with whom a double taxation treaty have been signed: See the list of the 17 Tax treaties signed by Taiwan
Withholding taxes: Dividends: 20%; Interest: 15%/20%; Royalties: 20%.
Bilateral agreement

Tax year: The fiscal year begins on January 1st and ends on December 31st of the same year.
Accounting standards: Taiwan's accounting principle follows the accounting standards promulgated by the International Accounting Standards Board (IASB).
Accounting regulation bodies: Directorate-general of budget, accounting and statistics.
Accounting reports: The Financial Accounting Standards Committee has been deliberating on the revised draft since May 22, 2008. The revised Statement which is equivalent to IFRS 8 is expected to be finished in 2009.
Consult the website of Accounting research and development foundation in Taiwan.
Publication requirements: Each company has to produce a balance sheet and a profit and loss account for each accounting year.
Professional accountancy bodies: The Department of Accounting
Certification and auditing: A Taiwan company with paid-in capital equal to or exceeding NTD 30 million must have a statutory audit financial statement. For more information, you can contact the Accounting research and development foundation in Taiwan.
Accounting news: Accounting research and development foundation in Taiwan.