Viewpoints
2019-10-02
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 […]
2019-10-02
When a foreigners or a foreign company, including residents and companies from Hong Kong, Macau and Mainland China, intend to carry out business in Taiwan, they can consider setting up a company limited by shares, a limited company or a branch office in Taiwan. The article brief explains the major features, the registration procedures and the documents and materials required for the registration of a limited company in Taiwan. This article is prepared for the reference of our clients. “Company? Here in this article refers to Limited Company. Features of Taiwan Limited Company (1) Name of Company A name that is similar to or identical to an existing company. A name that constitutes a criminal offence or is otherwise contrary to the public interest. A name that implies government patronage. (2) Directors of a Taiwan Company A minimum of one director is required to be appointed at the […]
2019-10-02
When a foreigners or a foreign company, including residents and companies from Hong Kong, Macau and Mainland China, intend to carry out business in Taiwan, they can consider setting up a company limited by shares, a limited company or a branch office in Taiwan. The article brief explains the major features, the registration procedures and the documents and materials required for the registration of a branch office in Taiwan by a foreign company. This article is prepared for the reference of our clients. 1. Features of Branch Office in Taiwan (1) Name of Branch Office The name of the branch office should be in the following format: Name of country of registration of the foreign company + name of the foreign company + Taiwan Branch Office. For example, a Hong Kong registered company named Kaizen Corporate Services Limited applies to set up a branch office in Taiwan, the name of […]
2019-10-02
1. Introduction In accordance with the prevailing laws and regulation, businesses registered in Taiwan are required to maintain accounting records and prepare annual financial statements in accordance with Taiwan Generally Accepted Accounting Principles (GAAP), which largely follow International Financial Reporting Standards (IFRS) and US GAAP. In addition, Taiwan’s income tax law requires that a profit-seeking enterprise keeps sufficient and accurate account records and supporting documents for calculation of its taxable income. 2. Accounting Books and Records (1) Accounting Period Businesses generally use the 1 January to 31 December calendar year as their accounting year, which is the same as the fiscal year for tax purposes. However, a company may, with permission, adopt a non-calendar year-end. (2) Bookkeeping Currency Accounting books must be denominated in the local currency (New Taiwan dollar, NTD). If accounts are kept in a foreign currency due to business needs, such currency must be translated into the […]
2019-10-02
(1) No Distinct Legal Identity In general, a Taiwan branch office of a foreign company does not have an independent legal personality. Establishing a branch in Taiwan theoretically subjects the foreign head office to the jurisdiction of the Taiwan courts. A branch office does not have shareholders, directors or supervisor(s). The foreign head office shall appoint an individual as its agent for litigious and non-litigious matters and a branch manager. The same person may be designated as both the litigious and non-litigious agent and branch manager, or two different individuals may be designated. In either case, the designated agent and the branch manager receive all instructions from the foreign head office. (2) Scope of Business The branch office is allowed to carry out business activities different from those of the head office or as approved by the business registration authority or any other licensing authority in Taiwan if such license […]
2019-10-02
It is estimated that the whole registration process would take around 6-8 months. The table below shows the estimated time frame for each of the steps for the registration process. Step Description Who is Responsible Working Days Preliminary 1 Legalization of identification documents of the head office Investor Investor’s schedule 2 Lease of office and execution of tenancy (lease) agreement Investor Investor’s schedule 3 Other documents Investor Investor’s schedule Application for Registration 4 Perform name available search Kaizen 5 5 Application for Approval from Ministry Of Economic Affairs, R.O.C Kaizen 10 6 Opening bank account Kaizen 7 7 Contribution and remittance of operating funds of the branch office Investor 8 Application for Business License (營利核准) Kaizen 7 Post Registration Procedures 9 Perform State Tax Registration(國稅局稅籍登記) Kaizen 7 10 Application for Approval and Carving of Company Seals Kaizen 3 11 Application for registration with the Bureau of Foreign Trade (optional) […]
2019-10-02
Type of Entity Branch Office of Foreign Company Subsidiary Limited Company Company Limited by Shares Character Foreign companies apply for recognition and set up branch office, for doing business in Taiwan. Shareholders apply for an independent corporation, for doing business in Taiwan. Company Name Translate foreign company name into Chinese language and apply for name verification. Name company & apply for name verification Documents 1. Certificates of the status of foreign companies /nationals 2. Authorization letter of proxy which legalized by Taiwan embassy 3. Investment plans Minimum Number of Shareholders 0 1 1-2 (Note 1) Minimum Number of Directors 1 (Note 2) 1 3 Minimum Number of Supervisors N/A N/A 1 Corporate Directors Permitted No (Note 2) No Requirement for Local Directors No Requirement for Local Supervisors N/A No Requirement for Registered Office Yes Requirement for Local Meeting No Yes Minimum Authorized Capital(Note3) Requirement for share certificates N/A No […]
2019-10-02
On 27 February 2019, the Financial Secretary of Hong Kong, Mr. Paul Chan, delivered 2019/2020 Budget. He proposed a one-off reduction of profits tax for the year of assessment 2018/19 by 75%, subject to a ceiling of HK$20,000 per case. This concessionary measure is applicable for the profits tax for the year of assessment 2018/19, that is, for the accounting period from 1 April 2018 to 31 March 2019. No additional application for this proposed concessionary measure is required. Taxpayers should file their profits tax returns as usual. Although this proposed concessionary measure is subject to review and approval by the Legislative Council of Hong Kong, it will generally be adopted based on experience. Hong Kong’s Tax System Hong Kong adopts a territorial source principle of taxation. Only profits arise in or are derived from Hong Kong are taxable here. Profits sourced elsewhere are not subject to Hong Kong Profits […]
2019-10-02
As part of the financial accountability that most entities provide to investors, board members, and constituents, the use of audited financial statements are common. Essentially, audited financial statements are simply the accounting documents that are prepared by a Certified Public Accountant on behalf of a business or non-profit organization. Here are some basic facts about audited financial statements, and how they are used. The source documents for the audited financial statements are usually provided by the organization wishing to have an auditor prepare a financial statement. This will often include a wide range of financial documents, such as Accounts Payable and Receivable information, expense reports, budgets, and any other type of financial record that the organization has in its possession. The purpose of the accountant is to take these various financial statements, evaluate and cross-reference them, and provide a professionally prepared audited financial statement that the organization can then present […]
2019-10-02
Territorial Source Principle Hong Kong Tax law adopts a territorial source principle of taxation. It means Hong Kong taxable profits only arise while such profits are derived from a trade, profession, or business carried on in Hong Kong. Basically, it seems quite clear and applies easily. However, over the years disputes about this subject and many related authoritative court decisions emerged, currently the Inland Revenue Department (IRD) will consider the following principles to evaluate whether the Hong Kong income is taxable or just offshore income only: – Matter of fact; The operations test; Gross profits from transactions; Place where decision is made; and Business presence overseas Based on the above principles, the Inland Revenue Department (IRD) also will classify whether profit is from trading business or from manufacturing business. Taxation of Trading Business For trading business, Inland Revenue Department’s practice to determine the locality of profits from trading in goods […]