The legislature in January 2018 approved provisions to reform Taiwan’s income tax law.
The tax reform measures would:
Corporate tax measures
The rate of corporate income tax would increase to 20% (up from 17%). Companies with annual taxable income less than NTD 500,000 would be subject to the 20% rate, but that rate would be phased in over a period of years.
The surtax rate for undistributed earnings would be reduced to 5% (down from 10%).
Individual tax measures
The rate of individual income tax for individuals subject to the bracket for greater than NTD 10 million would be reduced to 40% (down from 45%). Specific measures address the individual income tax treatment of dividend income by repealing the imputation tax system, and by allowing individual investors to select between two options for taxation, whichever affords the more favorable outcome.
There are also measures addressing the withholding tax treatment on dividend income received by non-residents (foreign investors) including an increase in the rate of withholding tax to 21% (up from 20%).
Read a February 2018 report [PDF 483 KB] prepared by the KPMG member firm in Taiwan
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