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Tax system in Taipei


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The tax system in Taiwan is fairly simple compared to other nations. Taiwan has a progressive taxation system, under which individuals are taxed between 6% and 40% of their income. Taxes are collected centrally and the revenue is distributed to local and regional administrations.

National Taxes

  • Customs Duties - Collected by the Directorate General of Customs, Ministry of Finance
  • Income Tax - Collected by National Tax Administrations of each county/city (Residents in Taipei City pay to Taipei National Tax Administration). Recently decreased from 20% to 17%, which will go into effect Jan 1st, 2011.
  • Estate and Gift Tax - Collected by National Tax Administrations of each county/city (Residents in Taipei City pay to Taipei National Tax Administration)
  • Commodity Tax - Collected by National Tax Administrations of each county/city
  • Securities Transactions Tax - Collected by National Tax Administrations of each county/city
  • Futures Transactions Tax - Collected by National Tax Administrations of each county/city
  • Business Tax - Collected by Revenue Service Offices of each county/city
  • Tobacco and Alcohol Tax

Local Taxes

Collected by National Tax Administrations of each county/city (Residents in Taipei City pay to Taipei National Tax Administration)

  • Stamp Tax
  • Vehicle License Tax
  • Land Value Tax
  • Agricultural Land Tax
  • Land Value Increment Tax
  • House Tax
  • Deed Tax
  • Amusement Tax

Value Added Sales and Services Tax/Excise Tax

A value added tax (VAT) is a form of consumption tax. It is a tax on the "value added" to a product or material where the end consumer is taxed. It differs from the sales tax in that, with the latter, the tax is collected and remitted to the government only once, at the point of purchase by the end consumer. With the VAT, collections, remittances to the government, and credits for taxes already paid occur each time a business in the supply chain purchases products from another business. /p>

The VAT is Taiwan is 5%.

Corporate Taxes

All corporations, sole proprietorships and partnerships, including the Taiwan branches of businesses with head offices overseas, who have incomes of TWD$ 50,000 or more, are required to pay tax on their Taiwan-derived income at a rate of 15% (income up to TWD100,000) or 25% (income over TWD100,000). Businesses are also liable to pay VAT, usually at 5%, on all their transactions within Taiwan.

Expat Taxes

Any foreign national who is non-resident but who works in Taiwan for more than 90 within a tax year will pay income tax at a rate of 20%, deducted by their employer. They are not required to file a tax return. Non-residents can apply for a refund at the end of the tax year if entitled to a lower tax rate.

Foreign nationals who are resident in Taiwan for more than 183 days in a tax year are liable for tax on all sources of income generated in Taiwan but not on income earned outside of Taiwan. There is a personal exemption of TWD72,000 for the taxpayer and each of their dependents.

Taiwan currently has double taxation agreements with 16 other countries including: United Kingdom, New Zealand, Australia, Singapore, the Netherlands, Denmark, and Belgium. These agreements allow two countries to eliminate the double taxation of income or gains arising in one territory and paid to residents of another territory. They work by dividing the tax rights each country claims by its domestic laws over the same income and gains.

For a complete description of Taiwan's taxes, go to Taipei National Tax Administration. You can also visit their office:
Office Hours: 08:30 - 12:30; 13:30 - 17:30 Monday - Friday
Service Counter: 08:30 A.M. - 17:30
Address:
No.2, Sec.1, Jhonghua Rd.,
Wanhua District, Taipei, 10802, Taiwan (R.O.C.)
Tel: (02) 311-3711, ext. 1118

Accountants

If you are unfamiliar with local laws and customs, a certified accountant or CPA can be invaluable. Expats recommend:
Ann Hu of Universal Law/CPA
OFFICE PHONE: (886) (2) 2381 1022
FAX: (886) (2)2381 1240
MAILING ADDRESS: 10F, 157, HAN CHUNG ST., TAIPEI
EMAIL: ulc@ms13.hinet.net

The Taiwan Yellow Pages can also offer guidance.

Update 10/12/2010


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