Taiwan
1. Basis of Taxation
Income is taxed on a preceding year basis, for example, income for 2010 is taxable in the year of assessment 2011. All taxpayers are required to submit tax returns on a self assessment basis.
a. For any individual, income tax shall be levied on his income derived from Taiwan.
b. For any profit-seeking enterprise having its head office in Taiwan, income tax shall be leviedon worldwide basis. For any profit-seeking enterprise having its head office outside Taiwan but having income derived from Taiwan, income tax shall be levied on territorial basis.
2. Corporate Tax
The minimum taxable amount and rates for profit-seeking enterprise income tax are as follows.
If the total taxable income is NTD$ 120,000 or less, the profit-seeking enterprise is exempt from tax. On the other hand, if the total taxable income is more than NTD$120,000, the income tax rate is 17%. However, the income tax payable shall not exceed one half of the portion of taxable income more than NTD$ 120,000.
3. Withholding tax rate (non-treaty)
|
Resident Individual/Corporation |
Non-resident Individual/Corporation |
Dividends |
Nil |
20% |
Interest |
10% |
20% |
Royalties/know-how |
10% |
20% |
Rents (for moveable property) |
10% |
20% |
Management fees |
Nil |
Individual: Nil,
Corporation : 20% |
Technical fees |
Nil |
Individual: Nil,
Corporation : 20% |
Directors’fees |
Individual: 5,
Corporation : Nil |
Individual: Nil,
Corporation : 20% |
4. Resident individual tax rates
Income tax of an individual shall be levied on the amount of his net income which shall be the gross income minus the amount of tax-exempt income, and various deductions.
The tax brackets and rates of consolidated income tax are as follows:
1. If the net income is less than or equal to NTD$ 500,000, the tax rate shall be 5%.
2. If the net income is above NTD$ 500,000 to NT$ 1,090,000, the income tax payable shall
be NTD$ 25,000 plus 12% for the portion of income more than NTD$500,000.
3. If the net income is above NTD$ 1,090,000 to NTD$ 2,180,000, the income tax payable
shall be NTD$ 95,800 plus 20% for the portion of income more than NDT$ 1,090,000
4. If the netincome is above NT$ 2,180,000 to NT$ 4,090,000, the income tax payable shall
be NT$313,800 plus 30% for the portion of income more than NT$ 2,180,000.
5. If the net income is above NT$ 4,090,000, the income tax payable shall be NT$ 886,800
plus 40% for the portion of income more than NT$ 4,090,000.
5. Non-residential individual tax rates
Unless otherwise provided in our Income Tax Act, a non-residential individual’s income derived from Taiwan shall be withheld and paid at the respective sources. According to The Standards of Withholding Rates for Various Incomes, anon-residential individual’stax shall be withheld in accordance with the following rules:
1. In the case of dividends or profits distributed , the withholding rate is 20%.
2. For salaries, 18% of the payment is withheld.
3. For commission, 20% of the payment is withheld.
4. Tax on interest is withheld from 15% to 20%.
5. For rentals, 20% of the payment is withheld.
6. For royalties, 20% of the payment is withheld.
7. For prizes or payment from contests and games won by chance, 20% of the full amount is
withheld.
8. For remuneration to professional practitioners, 20% of the payment is withheld.
9. For income from transactions in structured products between taxpayers and securities firms
or banks, 15% of the income derived is withheld.
10. For pension income, 18% of the balance of the payment minus the fixed exemption is
withheld.
11. For payment of reward for information provider or denouncement of tax evasion cases,
20% of the full payment is withheld.
The current Goods and Services Tax rate is at 7%. It is a requirement to register for GST when taxable supplies are or exceeds S$1 million.
6. Goods and Services tax
Value-added or non-value-added business tax shall be leviedon the sale of goods or services within the territory of Taiwan and on the import of goods.Except as otherwise prescribed by our Value-added and Non-value-added Business Tax Act, the goods and services tax rate is determined 5% now.
7. Estate duty
Estate tax will be imposed on taxable estate at the rate of 10%; the term “taxable estate” means the value of gross estate computed according to the provisions in Estate and Gift Tax Act, less deductions and exemptions provided in Estate and Gift Tax Act.
8. Stamp duty
The stamp tax rates or amounts are as follows:
- Monetary receipts: 0.4% of the amount received . Receipts for deposit of bid bonds: 0.1% of the money deposited .
- Contracting agreements: Tax stamps at 0.1% of the contract price.
- Contracts for the sale, transfer, or partition of real estate: 0.1% of the contract price,.
- Contracts for the sale of movables: NTD$4 per piece.
9. Property tax
The gain on disposal of chargeable assets is a kind of taxable income. The taxpayer
consolidates the gain on disposal of chargeable assets and other income, and then determine
the income tax payable according to our Income Tax Act.
10. Income tax filing deadlines
Types of Form |
|
Deadlines |
General return the Simplified return |
Residential individual |
31 May of the following year |
Nil |
Non-residential individual |
The tax is withheld at the respective sources when payment is made. |
Ordinary return、Blue return(note) |
Companies |
5 months from the date of closing accounts |
Ordinary return、Blue return(note) |
Partnerships |
5 months from the date of closing accounts |
Note：The Blue return refers to the tax form designed for encouraging
cooperation which declare their income honestly.
11. . Double Tax Agreements.
List of Rates of Withholding Tax of Dividends, Interest and Royalties under the Respective
Tax Treaties
Country |
Dividend % |
Interest % |
Royalties % |
Non-treaty Countries |
20 |
15,20 |
20 |
Australia |
10,15 |
10 |
12.5 |
Belgium |
10 |
10 |
10 |
Denmark |
10 |
10 |
10 |
France |
10 |
10 |
10 |
Gambia |
10 |
10 |
10 |
Hungary |
10 |
10 |
10 |
Indonesia |
10 |
10 |
10 |
Israel |
10 |
7,10 |
10 |
Macedonia |
10 |
10 |
10 |
Malaysia |
12.5 |
10 |
10 |
New Zealand |
15 |
10 |
10 |
Netherlands |
10 |
10 |
10 |
Paraguay |
5 |
10 |
10 |
Senegal |
10 |
15 |
12.5 |
Singapore |
40* |
Nil |
15 |
South Africa |
5,15 |
10 |
10 |
Sweden |
10 |
10 |
10 |
Swaziland |
10 |
10 |
10 |
UK |
10 |
10 |
10 |
Vietnam |
15 |
10 |
15 |
The tax shall not exceed an amount which together with the corporate income tax payable
on the profits of the company paying the dividends constitutes 40% of that part of the
taxable income out of which the dividends are declared.
Updated: Aug 2011
This publication has been prepared for the purpose of quick information dissemination to our counterparts in other Countries. Its contents should not be used as a basis for advice or formulating decisions under any circumstances.
|
