Key Takeaways
- Taiwan applies separate rules to financial statement audits, CPA tax certification and capital verification.
- Financial statement audit requirements depend on paid-in capital, net operating revenue or labour-insured employee numbers.
- Mandatory tax certification can arise from income thresholds, business activities or public issuance of shares.
- Filing a tax return does not complete the separate obligation to submit the CPA certification report and required attachments.
Foreign owners should identify which CPA engagement their Taiwan business needs before arranging its annual compliance timetable. Financial statement assurance, tax return certification and capital verification serve different purposes, and a company may need more than one engagement.
What Are Taiwan’s Company Audit Requirements?
Taiwan’s company audit requirements specify when financial statements, income tax filings or registered capital need examination by a certified public accountant. Annual financial statement audits depend on company size or applicable regulatory rules. Tax certification follows separate income and business-category tests. Capital verification applies when establishing a company or changing its registered capital.
Why CPA Reports Matter?
A correctly scoped CPA engagement helps owners meet the relevant reporting or registration obligation. It also helps overseas management identify which documents are needed locally and how Taiwan reporting fits into the group’s timetable.
Before appointing a CPA, establish whether the required deliverable is an audit opinion on financial statements, a tax certification report or a capital verification report.
Understanding the Three CPA Engagements
Financial Statement Audits
Company Act Article 20 requires annual business reports, financial statements and proposals for distributing profits or offsetting losses to be submitted for shareholder consent or approval. Companies meeting the prescribed thresholds must have their financial statements audited and certified beforehand.
The Ministry of Economic Affairs’ announcement, applicable from the 2019 financial year, establishes the following financial statement audit thresholds.
| Test | Requirement under the general Company Act framework |
| Paid-in capital | At least NT$30 million at the financial reporting period end |
| Net operating revenue | At least NT$100 million, where period-end paid-in capital is below NT$30 million |
| Labour-insured employees | At least 100 employees at the reporting period end, where paid-in capital is below NT$30 million |
For companies below the capital threshold, either size test is sufficient. The employee criterion specifically concerns participation in labour insurance. Separate securities regulations take precedence where applicable to companies that publicly issue shares.
STATISTIC-SOURCE: Ministry of Economic Affairs — Company Act Article 20 threshold announcement
Bank borrowing of NT$30 million is not an independent trigger under this announcement. Loan agreements may nevertheless impose their own financial reporting conditions.
CPA Tax Certification
CPA tax certification is an examination supporting an enterprise’s income tax return. It is distinct from an investigation or assessment conducted by the tax authority.
Article 3 of the applicable tax certification regulations requires certification by a CPA registered with the Ministry of Finance as a tax agent for:
- Specified financial businesses, including banking, insurance, futures and securities businesses, with the stated exclusion for securities investment consulting businesses.
- Enterprises that publicly issue shares.
- Enterprises with approved corporate income tax exemptions under relevant legislation whose annual net operating revenue plus non-operating income is NT$50 million or more.
- Enterprises filing consolidated income tax returns under applicable legislation.
- Other enterprises whose annual net operating revenue plus non-operating income is NT$100 million or more.
The tax certification income test includes non-operating income. This differs from the net operating revenue criterion used for financial statement audits.
Verification of Registered Capital
Under Company Act Article 7, incorporation capital must be verified by a CPA. The certification documents must accompany the incorporation application or be submitted within 30 days after registration. A registered capital change requires CPA verification before the change application.
These obligations do not depend on meeting the annual financial statement audit threshold. A sale of shares or business assets should be assessed according to its actual legal and registration consequences; it does not automatically constitute a registered capital change.
Comparing the Required Reports
| Engagement | Subject examined | Principal trigger | Typical deliverable |
| Financial statement audit | Annual financial statements | Company size criteria or separate regulatory requirements | Financial statement audit report |
| CPA tax certification | Corporate income tax reporting | Mandatory category or income threshold; voluntary certification may also be considered | Tax certification report and supporting schedules |
| Capital verification | Registered capital | Incorporation or a registered capital change | Capital verification report |
Review each obligation separately when determining the company’s required engagements.
Does Foreign Ownership Change the Assessment?
Foreign ownership alone is not an additional audit trigger in the general Company Act threshold announcement. For a locally incorporated company, assess the relevant capital, revenue and employee criteria, together with any applicable securities or sector rules. A foreign company’s Taiwan branch has a different legal form, so confirm its obligations separately. Overseas group reporting instructions and financing agreements should also be reviewed when agreeing the engagement scope. A report prepared for group purposes should not be assumed to satisfy a separate Taiwan statutory requirement.
Financial Audits and Undistributed Earnings
An annual financial statement audit and the calculation of undistributed earnings tax address different obligations.
Income Tax Act Article 66-9 sets the additional tax on undistributed earnings at 5% for earnings years from 2018 onward. Its calculation allows specified deductions, including qualifying following-year losses certified by a CPA. Certification supports that particular deduction; obtaining an audit does not create a general exemption from undistributed earnings tax.
Potential Advantages of Tax Certification
Loss carryforward: Income Tax Act Article 39 permits qualifying companies to deduct tax-authority-assessed losses from the preceding 10 years. The company must maintain complete accounting records, and both the loss year and the deduction year must use approved blue returns or CPA-certified returns and satisfy timely filing conditions. Certification is therefore one qualifying route rather than an automatic entitlement.
Entertainment expenses: Eligible CPA-certified filings can receive higher deduction ceilings. Supporting documents, applicable expense limits and timely submission requirements still apply. Late or incomplete certification report submissions can prevent access to these benefits.
How Can the Two Annual Tests Produce Different Results?
Consider a hypothetical company with NT$10 million paid-in capital, NT$90 million net operating revenue, NT$15 million non-operating income and 20 labour-insured employees. Assuming no separate regulatory trigger, it falls below the general financial statement audit thresholds. However, its combined operating and non-operating income is NT$105 million, exceeding the general tax certification threshold. It therefore needs tax certification despite falling below the financial statement audit thresholds. Review capital, revenue, other income and insured employee numbers separately when preparing the annual assessment.
When Must Audits and Filings Be Completed?
Financial statement audits required under Company Act Article 20 must precede shareholder consent or approval. For companies limited by shares, Article 170 generally requires the annual shareholders’ meeting within six months after year-end, subject to the applicable exception. The company should work backwards from its approval timetable when scheduling the audit.
Calendar-year corporate income tax returns ordinarily cover the previous year and are filed between 1 May and 31 May, subject to holiday adjustments or officially announced extensions. Approved non-calendar accounting years require a separate timetable.
For 2025 calendar-year income tax returns filed in 2026, the authorities confirmed:
| Obligation | Applicable 2026 deadline |
| Annual return and tax payment | 1 June 2026 |
| Physical delivery of CPA certification reports for internet-filed returns | 30 June 2026 |
| Electronic upload of CPA certification reports | 29 June 2026 |
These dates relate to that filing cycle. Check the relevant annual announcement before using them for another year. Confirm that the certification report itself, together with all required attachments, has been successfully delivered.
Companies subject to Securities and Exchange Act Article 36 generally have separate reporting obligations: annual audited financial reports within three months after year-end, and CPA-reviewed first-, second- and third-quarter reports within 45 days after quarter-end, subject to applicable regulatory exceptions.
Getting Documents Ready for the CPA
Agree on a document list and delivery schedule early. Practical preparation includes reconciling bank accounts and ledger balances and collecting invoices, inventory records, payroll schedules, capital documents and previous tax filings.
Business Accounting Act Article 38 generally requires accounting vouchers to be retained for at least five years, and accounting books and financial statements for at least 10 years, after completion of annual closing procedures. Exceptions apply to records requiring permanent retention and unresolved accounting matters.
A Practical Check Before Report Submission
Assign responsibility for each submission rather than treating completion of the return as completion of the engagement. Confirm the taxpayer name, reporting year, report type and required attachments. For electronic delivery, inspect the uploaded files and retain evidence of successful submission. The Taipei National Taxation Bureau warns that missing reports, another company’s report or incorrectly labelled files can result in ordinary-return treatment. Include a final attachment check in the filing timetable, particularly where certification supports loss carryforward or higher entertainment expense deductions.
How Premia TNC Can Assist Your Business
Premia TNC can help your Taiwan business organise its accounting information, review applicable reporting requirements and coordinate the appropriate CPA engagement.
Contact Premia TNC’s Taiwan team to discuss your company’s capital, annual revenue, non-operating income, employee profile and planned capital changes. Our team can help you establish the services and compliance timetable your business needs.
FAQs
Can a Smaller Company Benefit from CPA Tax Certification?
Potentially. A company below the mandatory income threshold may consider voluntary certification when assessing eligibility for loss carryforward or higher entertainment expense deductions. The value depends on its circumstances, statutory conditions and submission requirements.
What Are the Consequences of Missing an Audit Requirement?
Company Act Article 20 provides fines of NT$10,000 to NT$50,000 for responsible persons who breach its annual reporting or financial statement audit requirements. Failure to obtain mandatory tax certification attracts enhanced scrutiny under the certification regulations. Late certification reports may also affect tax benefits.
What Should Foreign Owners Check When Appointing a CPA?
Check that the accountant holds the relevant Taiwan qualifications and can undertake the required engagement. For tax certification, the regulations require a CPA approved and registered as a tax agent. Agree on the deliverables, fees, document deadlines and responsibility for submitting the report and attachments.
