Impostos a Taiwan, Xina

Company Tax

Tax Rate For Foreign Companies

Taiwanese companies are taxed on their worldwide income whereas non-resident companies are only taxed on their Taiwanese-sourced income.
A non-resident company with a fixed place of business or business agent in Taiwan is taxed similarly to a resident company. A non-resident company having no fixed place of business or business agent in Taiwan is subject to withholding tax at source on its Taiwan-sourced income.

Capital Gains Taxation

Capital gains obtained by domestic companies through the sale of Taiwan companies or other securities are not liable to income tax but are subject to Alternative Minimum Tax (AMT) at a rate of 12% (6% if the holding period exceeds three years). Foreign investors, on the other hand, are exempt from income tax on capital gains from the sale of Taiwan companies or other securities.

For profit-seeking enterprises, capital gains from the sale of land acquired prior to January 1, 2016, are subject to Land Value Incremental Tax (LVIT), with rates ranging from 20% to 40%. Please refer to the "Real property tax" section for further details.

Resident companies are subject to corporate income tax, ranging from 20% to 45%, on capital gains derived from the sale of real estate (including land and buildings) acquired on or after January 1, 2016. Nonresidents (related to a Taiwan branch of a foreign company) are liable to income tax at a rate of 45% on capital gains from the sale of real estate held for up to two years, or 35% if the property has been held for more than two years.

Moreover, the transfer of shares representing more than 50% interest in a domestic or foreign company, where over 50% of the company's share value or investment is attributed to real estate, will also trigger corporate income tax ranging from 20% to 45%. The incremental net value of the sold land is subject to LVIT but can be deducted from taxable capital gains when calculating the income tax payable.

Capital gains from properties other than securities and real estate mentioned earlier are subject to a 20% income tax rate.

Main Allowable Deductions and Tax Credits

All taxes, other than income tax, are generally deductible, unless where such taxes are related to tax-exempt income. Net operating losses may be carried forward up to 10 years. The carryback of losses is not allowed.

Start-up expenses during the start-up period can be deducted in the year incurred, the same as for interests on loans that are used for business purposes. However, for a loan from a non-financial institution, the interest rate shall not exceed 15.6%/year.

Deductions for losses on bad debts are permitted once specific legal procedures or time conditions have been fulfilled. In the case of such losses, they should initially be applied against the bad debt provision, which should not exceed either 1% of the total outstanding accounts receivable and notes receivable, or the average bad debt ratio from the previous three years.

Certain charitable contributions are not subject to any tax limit (national defence, morale of troops, contribution to government, etc.), while others are subject to various limits under the relevant regulations.
Fines and penalties are not tax-deductible.

Taiwanese companies and branches of limited partnerships can claim a tax credit of 15% (capped at 30% of taxable income obtained in a tax year) for their R&D expenditure. Starting from January 1, 2023, until December 31, 2029, Taiwanese enterprises engaged in R&D activities at their local facilities and playing significant roles in the global supply chain can benefit from tax credits allowing them to offset a portion of their current-year income tax liabilities. Specifically, they can credit up to 25% of the amount spent on R&D related to innovation, and up to 5% of the amount invested in advanced process machinery and equipment. However, certain conditions and an effective tax rate threshold must be met in order to qualify for these credits. The tax credit is limited to a maximum of 30% of the enterprise's corporate income tax payable for the year. However, if the credit is combined with other R&D expenditure tax credits and investment tax credits, the cap can be increased to 50%, with no restriction on the final year in which the tax credit can be utilized.

Furthermore, profit-seeking enterprises that meet the criteria as small and medium-sized enterprises (SMEs) have the opportunity to deduct salary expenses. Specifically, they can deduct up to 130% of the salaries paid to newly hired employees during the year, provided they fulfill certain requirements.

A tax credit for smart machinery, cyber security products or services and 5G system implementation expenditures can apply.
Tax incentives are available for investors located in prescribed areas (science parks, export processing zones, free-trade zones, etc.) or active in certain sectors (like biotech).

Other Corporate Taxes

Land and buildings are annually assessed for tax based on their officially assessed values as determined by the government authorities at the applicable rate. The land value tax rate ranges from 1% to 5.5% of the assessed land value. The building tax rate for commercial properties is 3% to 5% of the assessed value, and the rate for non-commercial properties is 1.2% to 3.6% of the assessed value. A Land value increment tax (LVIT) payable by the seller is levied on the sale of land, based on the increase in the government-assessed value of the land during the ownership period, adjusted for inflation, at regular progressive rates ranging from 20% to 40% (a special rate of 10% may also apply).

A real property transfer tax applies to all properties acquired on or after 1 January 2016, at a rate of 20% on Taiwanese corporate taxpayers or 35% on profit-seeking enterprises with foreign head offices located outside of Taiwan (45% if the property is held for less than a year). The taxable base is the market value of the properties reduced by related costs, expenses, and the increase in government-assessed land value for LVIT purposes.

Deed tax is imposed on the transfer of buildings, at rates ranging from 2% to 6% based on the deed price of the property as prescribed by the local real property assessment committee.

A tax is levied on securities transactions (with the exception of government bonds) at the rate of 0.3% on gross proceeds from the sale of domestic shares (reduced to 0.15% for day-trade transactions through 2024) and at varying rates between 0.0000125% and 0.6% on futures transactions.

Stamp duties are imposed on certain documents, with rates between 0.1% and 0.4% of the taxable basis.

Capital duty does not exist officially; however, a lump-sum fee of NTD 1,000 or 1/4,000 of the capital (whichever is higher) is levied upon capital subscription.

Although there is no social security tax in Taiwan, factories, mines and all companies with 50 or more employees must establish funds for employee welfare. There are two social security programs: Labor Insurance (11% on the employee's monthly insured salary up to TWD 45,800, with an additional 1% levied for unemployment insurance - the employer is required to contribute 70% of this premium); and National Health Insurance (5.17% of an employee's monthly insured salary, up to TWD 182,000 - 60% of such premium is borne by the employer). Furthermore, employers are required to contribute 6% of an employee’s monthly salary to employees’ pension accounts at the Bureau of Labor Insurance (monthly salary cap of TWD 150,000).

Other Domestic Resources

Department of Taxation

Tax Rate

Allowable Deductions and Tax Credits

A taxpayer may select either the standard deduction or itemized deductions. The standard deduction for a single taxpayer is TWD 124,000 (TWD 248,000 for married couples filing a joint return).
Itemised deductions include charitable contributions; insurance premiums (maximum of TWD 24,000/person/year for group insurance premium and labour insurance premium); medical expenses; calamity losses; either interest paid on loans for the purchase of an owner-occupied house in Taiwan (maximum of TWD 300,000) or rental payment (maximum of TWD 120,000) for the lease of a self-use residence in Taiwan.

A resident alien is eligible for a personal exemption of TWD 92,000, plus TWD 92,000 for the spouse and each dependant (TWD 138,000 for dependants over 70 years of age). A non-resident alien is not eligible for any personal exemptions.

Further deductions are provided for: salaries or wages (capped at TWD 207,000/person), interest earned from bank deposits (up to TWD 270,000 per tax filing unit), disabled or handicapped individuals (TWD 207,000/person), dependent child tuition (TWD 25,000 per child), losses from property transactions, etc.

Special Expatriate Tax Regime

Individual income tax is levied on the Taiwan-source income of both resident and non-resident individuals.

A non-resident alien residing in Taiwan for less than 90 days in a calendar year is subject to an 18% withholding tax on salary remuneration received from a Taiwan-registered entity (remuneration received from an entity registered outside of Taiwan is tax exempted).
A non-resident alien residing in Taiwan for more than 90 days but less than 183 days in a calendar year is subject to tax at a flat rate of 18% on Taiwan's taxable salary income, even if the remuneration is paid abroad.

 A non-resident taxpayer is not entitled to personal exemptions and deductions. Click here to consult the scope of application for tax preferences provided to foreign professionals.