Taiwan

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 […]

1. Scope of Taxation The commodity tax is a single-stage excise tax levied on specific commodities manufactured domestically or imported from abroad. 2. Taxpayer For taxable commodities manufactured domestically, the commodity tax is levied upon departure from a manufacturer’s premises. For taxable commodities imported from abroad, the tax is levied when customs duties are paid. The following table shows the scope of taxation and responsible taxpayers under the commodity tax: Scope of Taxation and Taxpayers under Commodity Tax Scope of taxation Taxpayer Exception Commodities manufactured domestically Manufacturer Commodities manufactured under consignment contract Consignee (i.e. manufacturer) If the consignor is a manufacturer of taxable commodities, the consignor can apply to be the taxpayer Commodities imported from abroad Recipient of the goods, holder of the bill of lading or holder of the goods 3. Taxable Commodities, Tax Rates, and Tax Amounts Seven categories of commodities are subject to the commodity tax levied […]

On June 15, 2015, the Taiwan Legislative Yuan approved the amendments to the Company Act. A special section on “Closely-Held Company” (“CHC”) was added to Chapter 5 (Company Limited by Shares) as a result of the amendments and the purpose is to encourage the growth of startups and small and medium enterprises and to accommodate the unique needs of tech startups. The amendments aim to create more autonomy for such companies and to increase the flexibility in share ownership arrangement and business operations of CHC. The amendment took effect on 1 July 2015. Key features of CHC are briefed as follows. Definitions A close company is defined as a non-public company with no more than 50 shareholders, the articles of incorporation of which stipulate restrictions on transfers of its shares (Section 356-1). To maintain its ‘non-public’ status, a close company must be a company that has not attained ‘public company […]

1. Introduction In accordance with the relevant tax laws and regulations, all sales of goods and services in Taiwan, as well as the importation of goods into Taiwan, are subject to business tax. Business tax is imposed under two systems: the value-added-tax (VAT) system and the non-value-added tax (Non-VAT) system. 2. Scope of Taxation Pursuant to the “Value-added and Non-value-added Business Tax Act?(Business Tax Act or BTA), the sale of goods and the provision of services in Taiwan, as well as the import of goods into Taiwan, are subject to business tax. (1) Sale of Goods A sale of goods is defined as the transfer of goods to another entity for compensation in Taiwan. In addition, any of the following circumstances will be deemed to be a sale of goods for business tax purposes: (i) Goods are produced, imported, or purchased by a business entity for its own consumption (except […]

1. Scope of Taxation   The building tax is levied on buildings and construction that strengthens the utility of buildings.   2. Taxpayer   The taxpayer is the owner of the building, or if a dien right has been established, the dien right assignor.   3. Tax Base   The building tax is levied on the government-assessed value of the building at the applicable tax rate. The government-assessed value is not the market value of the building, but rather the value as assessed by the tax office based on standards issued by the MOF. The value assessment factors are location, construction type (i.e. steel frame, etc.), and the total number of units in the building.   4. Tax Rate   The building tax rates are set by the municipal and county (city) governments in view of the local conditions within the range in the following table. Once approved by the local people’s assembly, the […]