Taiwan

In Taiwan, a company must register its company address within the territory of Taiwan. Some investors would choose to register the company address in their own residential or relatives and friends’ address for saving costs. For a residential address to be the company address, the house tax, land value increment tax, land tax, and the individual income tax of building owner would be affected in consequence. Also, the utility expenses are calculated in the basis of business operation rate. Kaizen is going to introduce the types of tax which would be affected for investors’ reference to evaluate registration in a residential address or commercial center which way is much preferential.   House Tax According to the article 5th in Hose Tax Act, the house tax rate for a residential address is 1.2%. If the residential address is used as a company address to register, the recognition of residential address would […]

For foreigners who obtain the approval of employment from Taiwan Ministry of Labor, they have to visit the Taiwan official entity situated at their local countries to apply for the visa before entering the territory of Taiwan. The holder shall exchange the visa into ARC (Alien Resident Certificate) to start working in 5 days from the date of entry.   The basic privileges for foreigners working in Taiwan as following:   Health Insurance For ARC holders, the national health insurance is mandatory to cover during the period of residency in Taiwan. The coverage of such insurance is all necessary medical expenditures, including paramedic, hospitalization, dental, Chinese medicines and prescribed medicines. The insured person still needs to afford a fixed amount of fees upon visiting a medical treatment, but the rest of amount will be covered by the national health insurance. Thus, it doesn’t need to worry about the medical and […]

Apart from the business of Taiwan company itself, the company which proceeds the investment concurrently and receives the dividends from the invested company is counted as dual-status business entity. The dividends received by the entity shall be combined into the last term of that year (which is the business tax return in November and December, the deadline is by the January 15th on the next year.) for coverage of the sales income for tax exemption, including dividends incurred from investment for Taiwan and foreign marketable securities and undistributed surplus earnings. Such income shall be declared with the net number of dividends in accordance with the Taiwan tax regulations. The common false is the dividends received from domestic or foreign companies are not listed into the tax exemption sales income to proceed tax return at the last term of that year and failure to adjust the non-deductible ratio in accordance with […]

For companies where business address is registered within Taipei City, the application “Business Location Pre-check” is required to be proceeded by Taipei City Hall before registration of a company, change of registered address and adding of business items to make sure the business items are complied with the regulations of urban plan and architectural management or other related laws.   Despite such pre-check is not compulsory for each district, apart from Taipei City, it is still suggested for the company to confirm if the registered address is fully complied with “Regulations on Land Use Control” as well as “Building Management Regulations” by signing the rental agreement. In the condition that such registered address is not under compliances, or the practical business is different than the business items submitted upon the application, the company would be requested to move out from the address and the water and voltage would be halted […]

Taiwan labor insurance is a job-based insurance. Labors who physically wok in Taiwan are qualified for the coverage. However, the labors who meet the following special conditions are also qualified for the coverage, even unemployed temporarily.   Serve military service, leave without pay during injury or sick or suspension during cases Under the status of employment, the insurer (company) cannot reject the coverage for insured persons (labors) and the application shall be submitted in papers. For those during injury or sick leave without pay, injured or sick for a period of less than one year, or absence from work for a period of less than two years as a result of industrial accident, it is required to submit the proof of diagnosis issued by clinics or hospitals. During the period of additional insurance, insured persons are not allowed to adjust the amount of insured salary randomly and the insurer is […]

Online transaction (E-commerce) is a booming type of marketing (trading) model, which means it can broaden its placements other than physical activities. Despite of its additional value, Organisation for Economic Cooperation and Development (OCDC), European Union (EU) and USA deem this type of transaction as physical transaction to levy taxes. Taiwan Ministry of Finance also follow their steps to stipulate related business tax and income tax regulations on online transaction to levy taxes.   From 2023, company which run their businesses through online platforms, apps, or other digital ways to proceed sales of labour forces and goods exclusively or concurrently shall register its “Domain Name” and “Member Account” as well as disclose its company name and uniform invoice number on the websites or apps clearly.   For companies which tax number was registered by 31/12/2022, if such companies would proceed online sales of goods and labour forces from 01/01/2023, it […]

The year to which export sales or service revenue belong shall be in basis of the date of customs declaration upon export sales and listed as income at that fiscal year. In the circumstance that the export sales were made by postal express or delivery agent, the basis date shall be in accordance with the date of stamp, instead of the date of payment made by buyer to list it as income.   In the condition of the export sales through customs, according to the item 2 in article 15th in “Regulations Governing Assessment of Profit-seeking Enterprise Income Tax”, the export sales shall be listed as income at that year of date of customs declaration, but for freights in small and light package which delivered by postal express or delivery agent, the basis date shall be in accordance with the date of stamp to recognize the fiscal year.   On […]

For encouraging exports, the export of physical products or services are applicable to zero tax rate of business tax in Taiwan. That is, the income earned from sales of exports is not only applied to zero tax rate but also refunded the input tax in full. The business tax can be exempted from imposition for encouragement of earning foreign currencies.   However, for zero tax rate applied to exports of labour forces in practices, although such encouragement is stated clearly in articles, the explanation of ordinances for both parties is different all the time. According to the article 7th in Business Tax Act “Services relating to export or services provided in the R.O.C. but used in a foreign country is applicable to zero tax rate”. The basis of labour forces “provided in the R.O.C. but used in a foreign country” is hard to judge, or the view of recognition for […]

William holds both Australian and Taiwanese passports. Although he has been residing in Australia for an extended period, he still has household registration in Taiwan. He is employed by an Australian company as an engineer and has been declaring and paying personal income tax in Australia (Note 1). In recent years, due to his elderly father’s illness, he intends to discuss with his Australian employer that possibility to returning to Taiwan to take care of his father while working remotely (WFH, Work from Home). He plans to live in his father’s home in Taiwan for more than 183 days in 2025, with his salary continuing to be paid by the Australian company to his bank account in Australia. However, William realizes that when it comes time to file his taxes in Taiwan for 2025, he is unsure whether he needs to report the income from the overseas company. Should this […]

With the growth of digitalized economic activities, to establish a “permanent entity” at the income incurred country seems not necessarily. For software industry, it is much convenient and accessible to provide their service online cross-country, so the taxation occurred on which country is becomes more unrecognizable.   For current service models in software industry, the models can basically be divided into the following 3 types from the history of development:   (1) Sales of Standardized Software (2) Sales of Non-standardized Software (Customized) (3) Online Model: SAAS, Software as a Services   In the circumstance of being a foreign software service provider, it is suggested to understand the definition of business conduct in Taiwan and the duty of taxation.   Sales of Standardized Software For physical sales of software without customized software service, the income is counted as general international trading recognition. That is, the income from customers solely be levied […]