Navigating Taiwan’s tax system is crucial for individuals and businesses to ensure compliance and financial efficiency. This guide provides a concise overview of key aspects, including personal income tax, corporate taxation, value-added tax (VAT) and other taxes.
From expatriates understanding their tax obligations to business owners optimizing tax planning, this resource offers clarity and practical insights. We explore deductions, exemptions, and strategies to navigate Taiwan’s tax landscape effectively.
Whether you’re new to Taiwan or a seasoned resident, mastering its tax system is essential for financial success. Join us as we demystify Taiwan’s taxation framework and empower you to make informed decisions for compliance and financial optimization.
Taiwan’s Tax System
Taiwan’s taxation system is divided into local and national levels. The Ministry of Finance is responsible for collecting national taxes from people and corporations in accordance with the numerous tax categories stipulated by law.
On the other hand, local governments rely on regional tax offices to collect taxes on construction, land, and acquisitions.
Furthermore, Taiwan’s government has a variety of direct tax categories, including the following:
- Deed
- House
- Land Value incremental
- Agricultural land
- Land Value
- Gift
- Future Transaction
- Security transaction
Taiwan also has a number of various indirect taxes at local and national levels.
Income Tax In Taiwan
Taiwan’s income tax is subdivided into income tax on individuals and income tax on corporations. Here are the differences:
1. Income Tax on Individuals
If you spend more than 182 days in Taiwan in a year, you are recognized as a resident under Taiwan’s tax legislation and are liable to the minimum tax computation on income earned in and outside Taiwan.
For a tax resident, the tax rates will range from 5% to 40%, depending on your taxable income. If you spent fewer than 183 days in Taiwan in a calendar year, your income would be subject to withholding tax at a set rate of 18 to 21%, depending on the type of income.
2. Income Tax on Corporations
Profit-seeking organizations in Taiwan are required to record all business revenue earned onshore and abroad (worldwide basis). Corporate income tax is fixed at 20%. Each year, between May 1 and May 31, the company is obliged to disclose its earnings for profit-making business by submitting a statement of settlement. If your fiscal year does not run from January 1 to December 31, you must file your corporation tax return within five months after the end of the fiscal year.
In the event of income derived from sources outside Taiwan, income tax paid in accordance with the relevant country’s tax regulations may be deducted from the total corporation tax payment amount, but not from any tax that exceeds the tax amount computed at Taiwan’s applicable tax rate.
3. Withholding Tax
A withholding tax is an income tax that is paid to the government by the payer of the income instead of the receiver of the money. Thus, tax is withheld or deducted from the recipient’s income. The general withholding tax rates on income generated from sources in Taiwan is listed below for resident and non-resident beneficiaries.
| Type of Income | Resident | Non-Resident |
| Pension Income | 6% | 18% |
| Prizes | 10~20% | 20% |
| Rentals, Royalties, Professional fees | 10% | 20% |
| Interests | 10% | 20% |
| Salaries, Wages, Commissions | 5% | 18% |
| Dividends | 0% | 21% |
Value Added Tax (VAT)
Taiwan’s company tax or VAT system is largely comparable to that of several European nations. Unless otherwise indicated in the tax legislation, VAT is charged at each level of the supply chain on products and services sold inside the territory of Taiwan.
The business tax on imported products is computed using the statutory tax rate and the gross value of the items after customs duty, commodities tax, and, if applicable, tobacco and alcohol tax.
For reference, the business tax or VAT rate is given in the table below.
| Type of Business | Tax Rate |
| Regular Tax Rate | 5% |
| Small-scale businesses | 1% |
| Small agricultural product suppliers or Wholesale agricultural traders | 0.1% |
| Coffee shops and bars offering companionship services | 25% |
| Nightclubs and restaurants with entertainment | 15% |
| Income from reinsurance premiums | 1% |
| Export goods and services | 0% |
Taiwan’s Stamp Tax
Stamp taxes are charged on payment receipts, deeds of sale of personal property, and real estate transactions, as well as contractual agreements.
The following table summarizes the types of papers and their associated tax rates.
| Document Type | Resident |
| Deeds of real estate transactions | 0.1% |
| Contractual agreements | 0.1% |
| Deeds of sales of movable properties | NTD$12 |
| Receipts of payments | 0.4% |
It is the responsibility of the person who signs or issues the document to pay the stamp tax. If both parties choose to retain the original document, they must each pay the stamp tax on the original document.
Tax On Commodities
The commodity tax is a one-time tax on specific commodities imported or manufactured domestically.
Securities Transaction Tax
Except for government bonds and some tax-exempt securities, all securities transactions are taxed.
| Types of Security Transaction | Tax Rate (on selling price) |
| Transactions of futures | 0.000001% to 0.6% |
| Shares and options | 0.3% |
Tax Filings and Payments in Taiwan
Fortunately, taxation in Taiwan is straightforward. You have two options: visit a tax office and speak with a professional, or use Taiwan’s electronic filing system. You may pay your taxes using the following methods:
- Wire transfer
- Payments through debit or credit cards
- Payments made with paper checks
- Cash
While Taiwan has several tax categories, the tax rate for expats in Taiwan is often lower than in many other nations. Additionally, Taiwan provides an easy-to-use tax system for overseas residents.
Conclusion
Tax filling in Taiwan is straightforward. We believe the information we have shared in this post gives you a better understanding of how to file for taxes in Taiwan. Once you understand how your task is calculated and the task category you fall into, you’ll not be in the dark as to how the deductions are made. Feel free to reach out to us on all your tax concerns, and we will respond to you promptly.
FAQs on Taiwan Tax Filling
When do I need to file my taxes?
From May 1 to May 31 after the fiscal year (the fiscal year is the same as the calendar year).
If you are leaving Taiwan and do not intend to return, you must file an early tax return within ten days after departing. We urge that you visit the tax office in person to file an early return.
What is the tax rate on salary income for a non-tax resident?
The income tax rate is 18 percent for non-residents whose salary is at least NTD$41,205 per month (as of 2024). Non-residents whose salary less than NTD$41,205 per month need to pay a 6% income tax.
How are standard deductions calculated?
The standard deduction is NTD$124,000 for a single taxpayer (as of 2024). The standard deduction is NTD$248,000 for a married couple. Please note that you cannot claim a basic deduction if you select an itemized deduction.
How am I supposed to file my personal income tax in Taiwan?
You may file electronically or in person at the tax office. It takes less than 20 minutes to file if you go in person. Additionally, you may e-file and save yourself a trip outside.
To download the e-filing system for foreigners, please visit the following link: http://tax.nat.gov.tw/info_IFNen_download.html?id=9#
When submitting your application with your passport number, use your most recent passport, even if the year for which you are filing was before you received your new passport.
Who should I contact to if I have a question while filing my personal income tax?
For particular inquiries, please contact the Taiwan tax administration at +886-2-2311-3711. Press 7 to access the English service.
