If the head office is located outside of Taiwan (e.g., a branch office of a foreign company in Taiwan) and has income from domestic sources, the income from the business in Taiwan shall be subject to profit-seeking enterprise income tax in accordance with the “Income Tax Act.”
Company organizations should adopt an accrual basis of accounting; non-company organizations may adopt a cash basis of accounting upon approval. If there is any inconsistency between the tax laws and the financial accounting standards in the recognition of revenues, costs, expenses and losses of the profit-seeking enterprise, adjustments outside the accounts should be made in accordance with the tax laws.
The tax rate for profit-seeking enterprises with an annual taxable income less than NT$500,000 will be adjusted annually to 18% in 2018, 19% in 2019, and 20% from 2020 onward, provided that the amount of tax payable does not exceed one-half of the profit-seeking enterprise’s taxable income in excess of NT$120,000.
Business tax is divided into value-added business tax and non-value-added business tax. All sales of goods or services and imports of goods within the R.O.C. shall be subject to business tax in accordance with the provisions of the “Value-added and Non-Value-added Business Tax Act.”
Commodity tax is levied when the taxable commodities are shipped or imported.
Tobacco and Alcohol Tax
The tax on tobacco and alcohol is levied on tobacco and alcohol produced domestically (including manufacturing, distribution, and other related activities) or imported from abroad at the time of shipment from the factory or import.
Securities Transactions Tax
Securities transactions tax shall be levied on the purchase and sale of securities, except for bonds issued by the government at all levels and other securities exempted by law. The securities referred to are bonds issued by the government at all levels, stocks and bonds issued by companies, and other securities approved by the government for public sale. The tax rates are described as follows.
The tax rate for shares and certificates or vouchers indicating stock rights issued by the company: Generally, 0.3% of the transaction amount; 0.15% of the transaction amount for offsetting transactions on the day of listing or listing on the OTC before December 31, 2024.
Futures Transactions Tax
All futures transactions on the futures exchanges in the Republic of China shall be subject to the futures transactions tax. The futures transactions tax is levied on both buyers and sellers, and is collected by the futures traders.
Land Value Tax
The land value tax is levied on the land within the Republic of China. In other words, the land outside the territory is not taxable. All land for which the land value has been stipulated shall be subject to land value tax except for the levy of agricultural land tax according to law. The land value is calculated and announced by the competent authorities under the jurisdiction of the city or county. The basic tax rate, the general progressive land tax rate and the special tax rate are used for land value tax.
Land Value Increment Tax
The land value increment tax is levied at progressive rates based on the multiple of land value increases. The current progressive tax rates are 20%, 30% and 40%. For those who have held the land for more than 20 years, the levy reduction is applicable. In addition, landowners who sell residential land for self-use in accordance with the regulations may be subject to a preferential tax rate of 10%.
The house tax is levied on the current value of the house and the tax rate applicable to the use of the house. The current value of a house is approved by the local tax collection authority based on the standard price of a house as assessed by the Real Estate Assessment Committee.
Any person who buys, sells, pawns, exchanges, gives, divides, or acquires ownership of a real estate by possession shall file a deed tax return. However, the land in the land value increment tax area is exempt from the deed tax.
All documents executed within the territory of the R.O.C. shall be subject to a stamp duty in accordance with the law. If the document is executed by multiple countries and parties, and only one of the signatories is executed within the territory of our country, the stamp duty shall be levied in accordance with the law.
Vehicle License Tax
The use of public water and land transportation, whether for public, private or military use, shall be subject to a vehicle license tax in addition to obtaining a license and paying fees in accordance with other relevant laws.
An amusement tax is levied on the fares or charges for the following places of entertainment, entertainment facilities or entertainment activities.
Professional singing, storytelling, dancing, circus, magic, artistic performances and nightclub performances.
Performances such as drama, music performance, and non-professional singing and dancing.
Various athletic competitions.
Ballrooms or dance floors.
Golf courses and other entertainment facilities available for those who wish to entertain.
If the above-mentioned entertainment venues, entertainment facilities or entertainment activities do not sell tickets but supply other beverages or entertainment facilities to entertainers, the entertainment tax will be levied according to the amount charged.
The amusement tax is levied on the following rates according to the fares or fees charged.
For films, the maximum rate may not exceed 60%. The maximum rate of local language films shall not exceed 30%.
Professional singing, storytelling, dancing, circus, magic, artistic performances and nightclub performances are limited to a maximum of 30%.
Dramas, music performances and non-professional singing and dancing performances are subject to a maximum of 5%.
Athletic competitions shall not exceed 10%.
Ballrooms or dance floors shall not exceed 100%.
For golf courses, the maximum rate shall not exceed 20%; for other entertainment facilities, the maximum rate shall not exceed 50%.
Depending on the actual local situation, the city and county governments may set their respective levy rates within the above-prescribed tax rates, submit them to the public opinion authorities of the cities and counties for approval, and submit them to the Ministry of Finance for approval.