Taiwan legal and accounting and tax considerations in 2023
Corporate income tax considerations
- Corporate income tax is a flat rate of 20% on corporate profits;
- The value-added tax rate of 5% is levied on sales of goods and services and exports. However, VAT is not levied on exports;
- The withholding rate for i) dividends ii) interest and iii) royalties paid to non-resident entities are 21%;
- Dividends received from resident companies are not taxed.
Miscellaneous tax matters
- Companies are subjected to a statutory financial audit if their capital is over US$1 million or they have a bank loan amounting to more than US$1 million;
- There is no holding company regime in Taiwan;
- Taiwan has no foreign exchange controls. However, a corporate entity is limited to a cap of US$50 million on inwards and outwards remittance conversion to NTD;
- Taiwan has signed 28 comprehensive double taxation avoidance treaties. Countries include i) Singapore ii) Australia iii) Malaysia iv) Netherlands v) UK vi) Germany;
- Taiwan has signed 14 international shipping/air transport double taxation treaties;
- PWC’s Paying Taxes 2017 survey rated the ease of paying business taxes in Taiwan as the 30th simplest the world. PWC estimates that it takes 221 hours and 11 payments each year to achieve tax compliance in Taiwan. The index can be used as a proxy to evaluate whether a country’s policy attracts or repels capital and talent.
Services Healy Consultant provides
- Healy Consultants’ compliance department guides our Clients through their legal and tax obligations;
- It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and will fulfil those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.
- There is no minimum the paid-up share capital requirement for private companies under Taiwanese company law. However, in order to employ a foreigner and ensure a smooth incorporation process, it is recommended to capitalize your firm’s Taiwanese subsidiary with at least US$17,000;
- Before company incorporation is complete, the Taiwanese government must review and approve a lease agreement for office premises;
- In accordance with the Taiwan Company Act, an LLC shall as from the date of its incorporation have a legal registered office in Taiwan, to which all official government communications and notices may be addressed.
Taiwan stock exchange (TWSE) admission requirements
- The company should have a paid-up capital of at least US$19 million;
- Company must have an audit committee comprising of not less than 3 independent directors;
- Public listed company should have at least 1,000 shareholders.
- Companies incorporated in Taiwan require an import licence to import goods. However, if local agents or distributors do not have import licences, companies can import through an import-export trading company. Exporters should confirm with their potential business partners which import approach will be used;
- Regular working hours are 8 hours a day and 84 hours in two weeks. Workers are granted leave on all national holidays, and other days designated by the Taiwanese government;
- Taiwan is a full member of i) the World Intellectual Property Organization (WIPO) ii) World Trade Organization (WTO) iii) the Paris Convention iv) the Patent Cooperation Treaty (PCT) v) the WIPO Copyright Treaty vi) the WIPO Performances and Phonograms Treaty (WPPT) vii) the Rome Convention and viii) the Kyoto protocol.