title: Taxation in Taiwan
text: # Taxation in Taiwan
  
  Part of a series on :
  
  Taxation :
  
  An aspect of fiscal policy :
  
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  Economics
  
  General Theory
  
  Price effect
  
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  Optimal tax
  
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  Base erosion and profit shifting (BEPS)
  
  Double Irish
  
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  Locations
  
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  Offshore financial centres (OFCs)
  
  Offshore magic circle
  
  Conduit and sink OFCs
  
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  Financial Secrecy Index
  
  Major examples
  
  Ireland as a tax haven
  
  Ireland v Commission
  
  Leprechaun economics
  
  Liechtenstein tax affair
  
  Luxembourg Leaks
  
  Offshore Leaks
  
  Paradise Papers
  
  Panama Papers
  
  Swiss Leaks
  
  United States as a tax haven
  
  Panama as a tax haven :
  
  Types
  
  Direct
  
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  Per unit
  
  Ad valorem
  
  Aviation
  
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  Solidarity
  
  Capital gains
  
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  Departure
  
  Hotel
  
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  Stamp
  
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  Vehicle miles traveled
  
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  Excess profits
  
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  Negative (income)
  
  Wealth :
  
  International
  
  Financial transaction tax
  
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  European Union Common Consolidated Corporate Tax Base (CCCTB)
  
  Global minimum corporate tax rate
  
  Tobin tax
  
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  Tax equalization
  
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  Transfer pricing
  
  European Union FTT
  
  Foreign revenue rule :
  
  Trade
  
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  Import
  
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  Tariff war
  
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  Trade agreement
  
  ATA Carnet :
  
  Research
  
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  Mihir A. Desai
  
  Dhammika Dharmapala
  
  James R. Hines Jr.
  
  Ronen Palan
  
  Joel Slemrod
  
  Gabriel Zucman
  
  Advocacy groups
  
  Institute on Taxation and Economic Policy (ITEP)
  
  Oxfam (UK)
  
  Tax Foundation (US)
  
  Tax Justice Network (TJN)
  
  Tax Policy Center (US) :
  
  Religious
  
  Church tax
  
  Eight per thousand
  
  Teind
  
  Tithe
  
  Fiscus Judaicus
  
  Leibzoll
  
  Temple tax
  
  Tolerance tax
  
  Jizya
  
  Kharaj
  
  Khums
  
  Nisab
  
  Zakat :
  
  By country
  
  All Countries
  
  List of countries by tax rates
  
  Tax revenue to GDP ratio
  
  Tax rates in Europe
  
  Individual Countries
  
  Albania
  
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  Argentina
  
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  Portugal
  
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  South Africa
  
  Sri Lanka
  
  Sweden
  
  Switzerland
  
  Taiwan
  
  Tanzania
  
  United Arab Emirates
  
  United Kingdom
  
  United States
  
  Uruguay :
  
  Business portal
  
   Money portal :
  
  vte :
  
  Taxes provide an important source of revenue for various levels of the Government of the Republic of China. The tax revenue of Taiwan in 2015 amounted NT$2.1 trillion.
  
  ## Tax administration
  
  The Ministry of Finance, which is part of the Executive Yuan, is the highest government entity responsible for implementing taxation policies and overseeing the leveling and collection of taxes. Taxation occurs at both the national and local government level.
  
  ### National taxes
  
  Two broad categories of taxes exist at the national level: customs duties and inland taxes. Customs duties are administered by the Directorate-General of Customs, which has local offices throughout the country. Five national tax administrations who are directly subordinate to the central government handle oversight of all inland taxes. Inland taxes is a broad term that includes:
  
  * Income Tax;
  * Estate and Gift Tax;
  * Value-Added and Non-Value-Added Business Tax;
  * Tobacco and Alcohol Tax;
  * Commodity Tax;
  * Securities Transaction Tax; and
  * Futures Transaction Tax
  
  ### Local taxes
  
  Individual municipalities, counties, and cities have set up Revenue Service Offices responsible for collecting a range of taxes, including:
  
  * Agricultural Land Tax
  * Land Value Tax
  * Land Value Increment Tax
  * House Tax
  * Vehicle License Tax
  * Deed Tax
  * Stamp Tax
  * Amusement Tax
  
  ## Tax legislation
  
  Unlike the Internal Revenue Code in the United States, there isn't one law that governs taxation in Taiwan. Rather, taxes are governed by a series of laws and regulations each related to a specific type of tax. As the chief legislative body, the Legislative Yuan plays an important role in formulating and revising tax related laws. The Income Tax Act is the primary law that governs individual income and profit-seeking enterprise income taxes.
  
  ## Individual income tax
  
  Both residents and non-residents are assessed individual income tax on Taiwan-sourced income unless an exception is provided in the Income Tax Act and related laws. Individuals are considered residents of Taiwan for tax purposes if they are either domiciled there, or spend for 183 days or longer in a taxable year.
  
  Income received in exchange for services rendered while physically present in Taiwan is considered to be Taiwan-sourced income regardless of if the payer is a local or offshore person or entity. One major exception to this rule exists for non-residents who are physically present in Taiwan for less than 91 calendar days in a year and who are only paid compensation by offshore entities.
  
  ### Progressive tax
  
  Taiwan has implemented a progressive tax system for individual income taxes. For the 2017 tax year, the tax rates were as follows:
  
  | Brackets (Unit NT$) | Rate (%) |
  | - | - |
  | 0 - 540,000 | 5% |
  | 540,001 - 1,210,000 | 12% |
  | 1,210,001 - 2,420,000 | 20% |
  | 2,420,001 - 4,530,000 | 30% |
  | 4,530,001 - 10,310,000 | 40% |
  | 10,310,001 and over | 45% |
  
  ### Filing of individual income tax
  
  By default, the tax year for all individuals and profit-seeking enterprises follows the calendar year. Income tax returns are due by May 31 of the following year, with no extension of time allowed. Taxpayers, including foreigners, are able to complete and file their tax return electronically through software provided by the local taxing authority.
  
  ## Profit-Seeking Enterprise Income Tax
  
  All profit-seeking businesses in Taiwan are subject to the Profit-Seeking Enterprise Income Tax. Sole proprietors and partners must file a return. However, their portion of the taxable income is reported on their individual income tax return.
  
  ### Income tax rate of profit-seeking enterprises
  
  In 2010, the top tax rate was reduced from 25% to 17%, and the threshold below which no tax is owed was raised from NT$50,000 to NT$120,000. Therefore, the current profit-seeking enterprise tax rates are as follows:
  
  | Taxable Income | Tax Rate |
  | - | - |
  | Below NT$120,000 | 0% |
  | Above NT$120,000 | 17% |
  
  The amount of tax payable shall not exceed half of the amount of the taxable income in excess of NT$120,000.
  
  ## Business tax (value-added tax)
  
      Tax amount = (sales - purchases) * tax rate
  
  Value-added tax (VAT) in Taiwan is currently 5% as of 1 June 2023.
  
  ## Securities transaction tax
  
  This tax is paid by sellers of Republic of China securities at a rate of 0.3% of the gross proceeds from the sale of shares issued by companies. A rate of 0.1% applies on the gross proceeds of corporate bonds, however, an exemption has been put in place through 2016. This tax is governed by the regulations set forth in the Securities Transaction Tax Act.
  
  ## Real estate speculation and the luxury tax
  
  Aimed at cooling off real estate speculation that was driving up the cost of living in Taipei City and other urban areas, the Republic of China government implemented a new luxury tax in June 2011. The law imposes a 15% sales tax on owners of second homes who sell within one year of purchase. Additionally, a 10% sales tax is charged against properties sold after being owned for between one and two years. Data provided by the Republic of China government in late 2011 showed that the luxury tax was having the desired effect, causing the average housing price in Taipei to fall nearly 12% while reducing overall volume of real estate transactions island-wide by nearly 15% in the June–October time period.
  
  ## Uniform invoice lottery
  
  First conceived in the 1950s, the Taiwan government created a uniform invoice system to encourage honest reporting of sales and prevent underpayment of taxes by businesspeople. To provide an incentive, the government launched a receipt lottery system. Each receipt is coded with an alphanumeric number, and every two months a lottery drawing is held with prizes ranging up to NT$10 million (approximately $335,000 USD as of February 2012) depending on how many numbers match. The lottery is governed by the Uniform Invoice Award Regulations.
  
  ## Historical tax revenue statistics
  
  | | 2010 | 2009 | 2008 | 2007 | 2006 |
  | - | - | - | - | - | - |
  | Gross Tax Revenue | 1,565,847 | 1,483,518 | 1,710,617 | 1,685,875 | 1,556,652 |
  | Individual Income Tax | 304,686 | 306,804 | 389,744 | 347,526 | 334,330 |
  | Profit-Seeking Enterprise Income Tax | 285,701 | 334,163 | 445,245 | 382,634 | 311,888 |
  | Unit: NT$ million ||||||
  | Source: Guide to ROC Taxes 2011 ||||||
  