Viewpoints from Kaizen

1. Preliminary Stage (1) Lease of Office Space Firstly, the parent company will have to enter into a tenancy agreement in relation to the office space to be used by the branch office. The office must be located in a commercial building. (2) Legalization of Identity Documents of the Head Office The parent company is also required to arrange to have the identity documents, such as Certificate of incorporation and Articles of incorporation and bylaws (including all amendments to-date) of the parent company legalized by the Taiwan Embassy in the country where the parent company is registered. (3) Legalization of Board Minutes and Power The parent company is also required to issue and have the Board Minutes, Power of Attorney appointing the company’s litigious and non-litigious agent and Power of Attorney appointing the branch manager legalized by the Taiwan Embassy in the country where the parent company is registered. (4) […]

1. Tax Incentives (1) No import duty, commodity tax nor business tax will be imposed on machineries, instruments, raw materials, fuel, materials and semi-finished products imported by a Park enterprise for its own use. The enterprise is also excused from the off-duty, warrant, filing, or tax-mortgage process. However, in case of exporting the mentioned items to taxed regions, enterprises should pay import duty, commodity tax, and business tax according to regulations. (2) All products or labor outputs exported by Park enterprises are exempted from business taxation. (3) Corporate income tax: 20%. 2. Protection of Investors’ Rights (1) Foreign investors enjoy the same benefits and rights as local investors. (2) Foreign investors can own 100% of share in Park enterprises and can seek co-investors from government sectors or local investors. (3) Foreign or overseas Chinese investors can apply for remittance of their investment profits, capital gains, or other capital interests. (4) […]

1. Overview Taiwan classifies all taxes into two categories: National tax and City/County/Municipal tax. The classification of taxes and the competent tax collection authorities are listed below: National Taxes Municipal Taxes     Income Tax Land Value Tax Business Tax (VAT and Non-VAT) Amusement Tax Securities Transaction Tax Land Value Increment Tax Futures Transaction Tax Stamp Tax Estate and Gift Tax Vehicle License Tax Tobacco and Wine Tax Building Tax Commodity Tax Farm Tax Customs Duty Deed Tax   2. Fiscal Year Taxable income is ordinarily determined by reference to the year ending 31 December, which is the standard Taiwan financial year. However, with the consent of the Tax Authorities, taxpayers may choose a substituted accounting period.   3. Types of Taxes Income Tax All foreign residents with Taiwan source income shall pay consolidated individual income tax in accordance with law on the basis of their Taiwan source income. Those […]

1. Forms of Capital Contribution The Statute for Investment by Foreign Nationals provides regulations relating to the protection and administration of investments by foreign investors, individuals or enterprises within the ROC. It recognizes four forms of putting up capital: (1) Cash in the form of foreign exchange that is remitted or brought in. (2) Machinery, equipment, or raw materials imported for own use against self-provided foreign exchange. (3) Technical know-how or patent rights. (4) Investment principal, capital gains, net profits, interest or any other income generated as a result of transfer of investment, education of capital, or dissolution/liquidation as approved by the government.   2. Types of Investments There are three types of investment: (1) Investments for establishing a new business or expanding the capital base of an existing business, made individually or in association with other foreign nationals, the ROC government, Chinese nationals, or juridical persons. (2) Purchases of […]

1. Introduction A profit-seeking enterprise is defined as an entity established in the form of a sole proprietorship, partnership, company (including a Taiwan branch of a foreign company), and any other form of organization that operates for profit-seeking purposes through a fixed place of business, regardless of whether the enterprise is owned by the government, private sector, or jointly by the government and the private sector. Profit-Seeking Enterprise Income Tax in Taiwan is similar to Enterprise Income Tax in China in nature. 2. Tax Base and Tax Rate A profit-seeking enterprise in the form of a sole proprietorship, partnership, or company (including a subsidiary that is wholly owned by a foreign company or a joint venture company) is subject to profit-seeking enterprise income tax on its worldwide income. The taxable income of a company for purposes of the profit-seeking enterprise income tax is gross income (including exempt income), less all allowable […]

1. Scope of Taxation Land that has been assigned a value is subject to the land value increment tax based on the total amount of land value increment at the time title to the land is transferred. Land transferred by succession, public land sold or donated by all levels of government according to law, and private land transferred to any level of government by gift is exempt. 2. Taxpayers The taxpayers of the land value increment tax are: (1) The original landowner for land transferred for consideration. (2) The claimer of land title for land transferred for no consideration. (3) The dien right assignor for a dien right that has been established on the land. Where title to land is transferred, if the land value increment tax due is not paid by the taxpayer within the relevant period, the new title holder of the land must pay the past-due tax. If the […]

1. Introduction Taiwan residents are subject to national taxation on their earned income, including wages, salaries, benefits and pensions. National income tax is progressive, the scale ranging from 0% to 40%. In addition to income tax, individuals in employment are liable for social security payments, which consist of occupational pension, unemployment and health insurance contributions. All foreign residents with “ROC source income” shall pay consolidated income tax in accordance with law on the basis of their ROC source income. 2. Tax Base In accordance with Taiwan Income Tax Act (ITA), individuals are only subject to income tax on Taiwan source income with income derived from foreign sources being exempt from income tax. Residents, both Taiwanese and foreign nationals, pay tax on net consolidated income calculated as the total income received from all Taiwan sources less exemptions and deductions. Non-residents who stay in Taiwan not over 90 days within a calendar year are […]

1. Introduction Taiwan estate and gift taxes are levied on the worldwide assets of Taiwan-domiciled individuals. If a Taiwanese national does not have a Taiwan domicile, but has a residence in Taiwan, his/her worldwide assets are subject to the Taiwan estate and gift tax if the individual’s total stay in Taiwan exceeds 365 days in the two years before the date of decease or gift transfer. 2. Estate Tax Taxpayers of the estate tax are in order of priority: the executor, heir(s), legatee, or inheritance managers. The taxable amount is the fair market value of assets on the date of death. The law allows an exemption of NTD 12 million for each taxpayer. If the taxpayer is a long-term resident of Taiwan, other related deductions are available in determining the taxable estate. In addition, if an inheritor investing in Taiwan qualifies under the Statute for Investment by Overseas Chinese, the audited […]

1. Tax Base Trading of futures in the Taiwan Futures Exchange within the territory of Taiwan is subject to the futures transaction tax. 2. Taxpayer The taxpayer of futures transaction tax shall be the sellers and buyers of the futures and the futures commission merchant is responsible for collecting the tax. Futures transaction tax is collected by the futures commission merchant (FCM) on the date of the transaction at the rate specified, and the tax must be paid to the national treasury on the following day. 3. Tax Base Catalog of Transaction Assessed Tax Rate Stock index futures contracts 0.002% on the transaction price of the contact Interest rate futures contracts 30 days interest rate futures: 0.0000125% 10 years government bonds futures: 0.000125% Option contracts or option contracts on futures 0.1% based on the premium paid. Other futures contracts Gold futures: 0.00025% on the transaction price of the contact  

1. Scope of Taxation The deed tax is levied on the transfer of title of real estate through sale, acceptance of a dien right, exchange, donation, subdivision, or occupancy, except where the land value increment tax applies. The deed tax is payable at the time of transfer. 2. Taxpayer The taxpayer of the deed tax is the party that acquires title to real estate through any of the following: (1) Purchase and sale: reported and paid by the purchaser. (2) Establishment of a dien right: reported and paid by the dien right assignor. (3) Exchange: reported and paid by each party to the exchange on the portion allocated to each party. (4) Donation: reported and paid by the recipient. (5) Trust: reported and paid by the trustee. (6) Subdivision: reported and paid by the partitioner. (7) Acquisition by possession: reported and paid by the acquirer. 3. Tax Base The deed […]