Taiwan Tax System
(1) Taxable Income
For profit-seeking enterprise having its head office within Taiwan territory, an income tax shall be levied on its total onshore and offshore income. In case the entity already paid income tax to foreign government for its offshore income, such paid tax may be deducted against the tax payable to Taiwan tax office (foreign tax credit). However, the deducted amount shall not exceed the increased tax payable computed base on the applicable domestic tax rate if include the offshore income in its tax return.
(2) Income Tax Rate
The general corporate tax rate for Taiwan companies is 20%. However, for companies with taxable income lower than NTD $500,000, the income tax rate is increased progressively from 2018 to 2020(18% for 2018, 19% for 2019 and 20% for 2020 and going forward).
(3) Filing of Tax Returns
Interim corporate income tax filing is due prior to the end of the 9th month of the fiscal year, which for most companies the due date is 30th September.
The company’s filing is assessed based on one half of the prior year’s tax liability. Year-end corporate income tax filing is due prior to the end of the 5th month after fiscal year-end, which for most companies the due date is 31st May of the following year.