There are many important tax related deadlines to remember as a business owner in Taiwan, such as the Taiwan tax filing deadline and more. Are you still troubled by the various deadline and complicated procedures for filing taxes in Taiwan? Generally speaking, Taiwan Ministry of Finance and National Taxation Bureau have announced all kinds of tax regulations and rulings, but the wordings and phrases are so difficult to read and often cause entrepreneurs headaches! This article will use the simplest analysis to introduce you to the Taiwan tax filing deadline and important information. After reading through the article, you will be able to manage your tax filings on time well.
Corporate Tax Filing Deadline
There are several types of tax filings in Taiwan: corporate income tax, value-add tax (VAT) and withholding tax (WHT). This article will give you the introduction and deadline for these various tax filings, thus, you can prepare the submission in advance in order to have enough time to review and manage your financing schedule.
Annual Income Tax Return
The official filing period of the corporate income tax filing in Taiwan is within the 5th month after the tax year is ended. For a company whose tax year is ended at December 31st, its deadline for corporate income tax filing will be May 31st of the following year. You can choose any day in May to file the corporate income tax return until the month end.
The tax filing form is written in Chinese and must include the following information:
- Balance sheet
- Corporate income tax calculation
- Undistributed income tax form
- Reconciliation forms for revenue and expenses
- Alternative minimum tax calculation
- List of fixed assets
Dividend distribution schedule
Please note that if the Taiwan company’s annual sales reach NTD$100 million, the tax return must be audited by a local certified public accountant (CPA).
Provisional Income Tax Filing
According to Taiwan’s tax regulations, the provisional income tax system is similar to the installment payment and the amount is temporarily paid to the National Taxation Bureau. September 1st to 30th is the period for provisional income tax filing. The payment amount to the National Taxation Bureau is calculated as half of the previous year’s annual tax payment amount. When filing the year-end tax return, the provisional income tax paid can be offset to the annual income tax payable and any over-paid portion can be refunded. This is to prevent taxpayers paying a large amount of income tax at one time when they file the annual income tax in May.
For companies who are running out the cash during the provisional income tax filing, they can file the provisional income tax based on the actual profit of the 1st half of year. But in order to enjoy the reduced provisional income tax payable, the tax filing must be subject to the audit by a local CPA.
The VAT system in Taiwan is generally similar to many European countries. VAT is levied on the sales of goods and render of services within the territory of Taiwan. The VAT filing is generally performed every 2 months and the deadline is the 15th of following month, e.g. March 15th is the deadline for the January and February VAT filing. The tax payable amount is calculated by output VAT minus input VAT. If the input VAT is more than output VAT, the exceeded amount will be carry forwarded to the next period.
In order to encourage the exporting business, exporting companies can apply for 0% VAT and claim the input VAT refund. These companies can also file the VAT in a monthly basis so can improve its cash flow.
Annual Withholding Tax Reporting
The annual withholding tax is also a very important tax filing in Taiwan. If you have local employees or pays the professional service fees to a lawyer or CPA, you need to report the annual payment to the National Taxation Bureau by the end of January of the following year. When filing the withholding tax reporting for individual taxpayers, you will need to input their personal information of the taxpayers such as name, ID and address. If the taxpayer is a law firm or CPA firm, the reported information will include the firm’s name, address and GUI no.
Other Regulatory Filing Deadlines
The company representative and major shareholder reporting policy was just launched in 2018. Companies need to report its director, supervisor and 10% shareholder(s) with their nationality, birth date, ID and holding shares. The deadline for the reporting are as below:
- If any change during a year, the deadline will be 15 days after the change.
- For a newly set up company, the deadline will be 15 days after the incorporation.
- No change during a year, the deadline will be March 31st.
What is the penalty if I fail to file the corporate income tax
10% of assessed tax payable will be fined if the taxpayer files the tax return within 15 days from the date of receipt of the delinquent notice by tax office; The administrative fine shall not be less than NT$3,000 or more than NT$60,000.
20% of deemed tax payable by tax office will be fined if taxpayer still fail to file the tax return within the above deadline; The administrative fine shall not be less than NT$9,000 or more than NT$180,000.
What is the penalty if I fail to file the VAT?
The business Visa fee is NTD$1,600 (USD$50) for nationalities other than the US. For US persons, the business Visa fee is NTD$5,280 (USD$160). If you want to speed up the application process, you can pay an additional fee of NTD$800 (USD$25) as the rush 1% of the tax payable for every two days overdue provided that the filing is less than 30 days past due. The administrative fine shall not be less than NT$1,200 or more than NT$12,000.
For late filing cases exceeding 30 days, 30% of the tax payable will be fined. The amount of this surcharge shall not be less than NT$3,000 or more than NT$30,000.
Where there is no tax payable, the surcharge for belated filing or non-filing shall be NT$1,200 and NT$3,000 respectively.
In the case of a taxpayer still failing to pay any additional tax within the specified time limit, a 1% surcharge for every two days will be charged. If the payment is not met thirty days after the time limit, the competent tax authority may, in addition to referring the case to the court for compulsory execution , suspend its business.handling fee.
What is the penalty if I fail to submit the company representative and major shareholder reporting
If a company fails to submit the company representative and major shareholder reporting, the Taiwan government authority will notify the company to rectify its law violating act within a given time limit.
If the company fails to take corrective action beyond the given time limit, the director representing the company shall be imposed with a fine of not less than NT$ 50,000 but not more than NT$ 500,000.
If the company still fails to take corrective action beyond the second given time limit, the director representing the company shall be imposed with a fine of not less than NT$ 500,000 but not more than NT$ 5,000,000 consecutively for each non-compliance until the law-violating act is rectified. If the violating act is material, the central competent authority may nullify its incorporation registration.