Tax Incentives / Reductions

Taiwan offers a range of tax incentives aimed at attracting foreign investment and stimulating economic growth. Here are some key highlights:

• Investment Incentives: The Taiwanese government provides investment incentives to encourage foreign companies to invest in targeted sectors or regions. These incentives include tax credits, reduced tax rates, or accelerated depreciation allowances.

• Research and Development (R&D) Incentives: Foreign businesses engaged in R&D activities in Taiwan may be eligible for tax deductions or credits related to R&D expenses, aiming to foster innovation and technological progress.

• Free Trade Zones (FTZs): Taiwan has designated FTZs where foreign companies can benefit from tax advantages such as exemptions from import duties, value-added tax (VAT), and business taxes for qualified transactions conducted within these zones.

• Tax Treaties: Taiwan has signed tax treaties, known as double tax agreements (DTAs), with various countries to prevent double taxation and offer reduced tax rates on specific types of income, including dividends, interest, and royalties.

• Income Tax Act Article 25 - Tax Reductions: Article 25 of the Income Tax Act provides tax reductions in Taiwan for profit-seeking enterprises headquartered outside Taiwan engaged in certain activities within Taiwan. These activities include:

  • international transport
  • construction contracting
  • providing technical services
  • machinery and equipment leasing
  • international transport

  Enterprises whose costs and expenses are difficult to calculate can seek approval from the Ministry of Finance. Alternatively, the Ministry of Finance may consider 10% of total business revenue for enterprises in international transport or 15% for other businesses as income derived within Taiwan, irrespective of whether they have a local branch office or business agent.

• Income Tax Act Article 8 - Tax Reductions: Foreign profit-seeking enterprises without a fixed place of business or agent in Taiwan may apply for tax reductions on income generated within Taiwan. This applies to various sectors including industry, commerce, agriculture, and others.

These measures aim to facilitate a favorable environment for foreign investment in Taiwan, supporting business growth and development.

Our services include:

• Application for local business tax residency certificates.

• Assistance with tax treaty qualification for foreign businesses and individuals.

• Application for Income Tax Act Article 25 tax reductions.

• Support in applying for Net Profit Ratio and Domestic Profit Contribution Ratio for foreign businesses.

• Income tax filing services for foreign businesses.

• Assistance with refund of overpaid withholding tax.

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