Foreign investors who establish a company in Taiwan, whether it is a company, branch office, or sole proprietorship (unlimited company), must comply with relevant tax regulations. Failure to file tax returns on time or underreporting may result in fines.
The tax obligations for foreign-invested companies in Taiwan are the same as those for domestic companies. If a company makes sales, it must issue invoices. Business tax ("VAT") must be declared every two months (odd months), and corporate income tax must be filed annually.
What is issuing an "invoice"?
In Taiwan, sellers must issue invoices to buyers based on the transaction amount. The invoices received by a company are called "input invoices," while the invoices a company issues for its sales are called "output invoices." In simple terms, received invoices are "input," and issued invoices are "output." The basis for business tax reporting is calculated as: Total Output Invoice Amount – Total Input Invoice Amount × 5% In other words, business tax is 5% of the company’s gross profit.
What is "Business Tax"?
Business tax is levied under the Value-Added and Non-Value-Added Business Tax Act. The general business tax rate is 5%, and it is reported every two months (odd months). The calculation is:
(Output – Input) × 5% = Business Tax Payable
Simply put, business tax is 5% of a company's gross profit.
For example:
A product is purchased for NT$100 (with an input invoice).
It is sold for NT$200 (with an output invoice).
The profit is NT$100.
(200 – 100) × 5% = NT$5, which is the payable business tax.
What is "Corporate Income Tax"?
Corporate income tax is levied under the Income Tax Act and is reported annually. The corporate income tax rate is 20%.
If a company's profit does not exceed NT$120,000, it is exempt from corporate income tax but must still file a tax return. Profits must still be distributed to shareholders.
If the profit exceeds NT$120,000, the company must pay corporate income tax.
There are two methods for filing corporate income tax:
(A) Estimated Taxation Method (Expanded Audit)
Formula: Annual Total Revenue × Prescribed Profit Rate (6%) × 17% (Corporate Income Tax Rate)
Example:
If a company's annual revenue is NT$3,000,000,
Multiply by 6% (prescribed profit rate) = NT$180,000,
Multiply by 17% (corporate tax rate) = NT$30,600,
The payable corporate tax is NT$30,600.
(B) Actual Accounting Method
Corporate tax is calculated based on actual profits:
(Annual Output – Annual Input – Business Expenses) × 20%
Example:
Annual Output: NT$3,000,000
Annual Input: NT$2,000,000
Operating Expenses: NT$700,000
Profit = NT$300,000
NT$300,000 × 20% = NT$60,000 corporate tax payable.
Professional Accounting and Tax Services Our accounting and bookkeeping team consists of certified professionals who have passed national examinations and have extensive experience. We provide expert tax and bookkeeping consulting services to help foreign companies in Taiwan operate legally and focus on expanding their business with peace of mind.
Accounting & Tax Services and Pricing
Our fees are reasonable and our services are professional. Our services and charging standards are as follows:
Services Provided:
1.Monthly Bookkeeping & Tax Filing (January – December)
2.Withholding Tax Filing & Certificate Issuance (January of the following year)
3.Annual Corporate Income Tax Filing (May of the following year)
4.Undistributed Profit Tax Filing (May of the following year)
5.September Provisional Tax Filing
Accounting, Business Tax, and Corporate Tax Consultation.
7.Shareholder Information Reporting
8.Second Generation NHI Tax Reporting
9.Corporate Profit Distribution Planning
Pricing:
1.Bookkeeping Fees: Charged for 14 months per year
Expanded Audit Filing: NT$2,000/month (Domestic)
NT$2,500/month (Foreign-invested companies)
2.If not using the Expanded Audit Method, bookkeeping fees increase by NT$1,000/month
3.No bookkeeping fees for the first month if no invoices are issued
4.Fees for the second year are adjusted based on revenue and filing method
5.Excludes inventory cost statements and non-routine matters
6.Custom pricing for a full set of accounts
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