TAIWAN FAQ

Company Incorporation

All Taiwan business entities must register their name with the Taiwan authority in Chinese. English name is optional and we usually suggest our clients to register their English name if they need to do any international transactions or payments.

A foreigner can be the director of the Taiwan company and he/she does not need to reside in Taiwan.

It should be separately explained from a legal and tax point of view.

From the legal perspective, a limited company is a separate legal entity from its investor. The investor can enjoy the limited liability protection and only be responsible for the capital amount they invested. However, a branch is not a separate legal entity from its headquarter. The headquarter and the branch representative need to bear the unlimited responsibility for the Taiwan branch.

From the tax perspective, a branch is more favorable than a limited company because the limited company will be subject to 21% WHT for dividend distributed to foreign investors, but for a branch, there is no WHT tax for earnings distributed to the headquarter.

This is the key issue to consider before you decide to set up a limited company or branch.

Accounting Auditing Taxation

For any company whose head office is located in Taiwan, its corporate income tax will be levied on its income derived within or outside of Taiwan (global income taxation). They can apply for foreign tax credit when filing their income tax return if they paid any income tax in an offshore country.

For any company whose head office is located outside of Taiwan, its income tax will be only levied on its income derived within Taiwan.

The Taiwan corporate income tax is calculated as below:
(P = taxable income, T = tax payable)
(1) If P ≤ NTD$120,000, it is exempted from income tax.
(2) If NTD$120,000 < P ≤ NTD$200,000, T = (P – 120,000) X 1/2 (3) If P> NTD$200,000, T = P X 20%

Tax corporate income tax should be filed between May 1 to 31. However due to COVID-19, the tax filing deadline for 2020 corporate income tax has been extended to June 30, 2021.