Taiwan corporate tax - guide for international expansion

Expanding your business to Taiwan? Understanding the corporate tax landscape is crucial for making informed decisions about this dynamic East Asian market. Taiwan offers a strategic location, advanced infrastructure, and a skilled workforce, making it an attractive destination for international businesses.

Whether you're considering setting up operations, hiring talent, or acquiring a local entity in Taiwan, understanding corporate income tax requirements will help ensure compliance and effective financial planning. With Wise Business, you can streamline your international payments and manage your finances efficiently as you navigate Taiwan's business environment.

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This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Taiwan Corporate tax rate in 2025

The standard corporate income tax rate in Taiwan is 20%, applicable to companies with taxable income exceeding NT$120,000. Enterprises with taxable income of NT$120,000 or less are exempt from corporate income tax, providing relief for very small businesses.¹

Taiwan's corporate tax rate is competitive within the Asia-Pacific region, sitting below the global average of approximately 23.5%. The government has maintained this rate structure to attract foreign investment while ensuring adequate revenue collection for public services and infrastructure development.²

Resident companies in Taiwan are subject to corporate income tax on their worldwide income, while non-resident companies are only taxed on Taiwan-sourced income. A company is considered resident if it is incorporated in Taiwan or has its place of effective management in the country. In addition, a 5% surtax is levied on undistributed earnings of resident companies, and an alternative minimum tax (Income Basic Tax) may apply in certain cases.¹

Read more about Corporate Tax Planning best practices

How to pay corporate tax in Taiwan

Corporate income tax in Taiwan must be paid in New Taiwan Dollars (TWD) through the country's electronic filing and payment system. The Taiwan tax authority, known as the Ministry of Finance, requires most companies to use its online platform for both filing returns and making payments.⁴

Companies must make provisional tax payments during the year. For calendar-year taxpayers, this is generally due in September and equals 50% of the previous year’s tax liability. Adjustments may be allowed if the company’s performance in the first half of the year shows a significantly different result. The balance of tax due is settled when the annual return is filed.⁵

The tax year in Taiwan follows the calendar year from 1 January to 31 December, and companies must file their annual corporate income tax returns by the end of May following the tax year.³

Late payment surcharges apply at a rate of 1% every three days on the outstanding balance, capped at 10% of the tax due. Additional fines may also apply for late filing or non-compliance, depending on the severity and duration of the delay.⁶

Let's calculate the annual tax liability for a company with a turnover of NT$48 million (approximately £1.5 million). Assuming a profit margin of 10%, the taxable income would be NT$4.8 million.

At Taiwan's standard corporate tax rate of 20%, the annual tax due would be:

NT$4.8 million × 20% = NT$960,000

When expanding your business to Taiwan, the right financial tools will make the process smoother. Using a platform like Wise Business makes it easy to manage international finances. A multi-currency account allows businesses to pay for incorporation costs, registration fees, and government taxes in local currency without paying high exchange rate fees.

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Tax Compliance in Taiwan

Staying compliant with Taiwan’s tax regulations requires careful attention to both corporate governance and reporting obligations.⁷

• Annual General Meeting (AGM): Companies must hold an AGM within six months after the fiscal year ends to approve financial statements and elect directors. Shareholders must receive at least 20 days’ notice, and financial reports must be available 10 days in advance.
• Corporate records: Registers of shareholders and directors and meeting minutes must be accurately maintained and accessible for inspection.
• Annual filing: An annual report must be submitted to the Ministry of Economic Affairs within six months after year-end, covering financial data and shareholder changes.
• Corporate tax filing: The standard Taiwan corporate tax rate is 20%, with exemptions below TWD 120,000. Returns are due by 31 May or the fifth month after a non-calendar fiscal year ends. Accurate corporate tax computation and corporate tax solutions help avoid penalties.
• VAT compliance: Businesses must register if their sales exceed TWD 480,000. VAT is 5%, and registration is filed every two months, with payment due on submission.

International Expansion to Taiwan

Taiwan has become one of the world’s most dynamic business destinations. Ranked among the top 20 global economies by GDP, it is the United States’ 8th largest trading partner and plays a critical role in high-tech supply chains. Its 23.5 million population supports an export-driven economy, powered by globally competitive industries such as semiconductors, 5G telecommunications, AI, and the Internet of Things (IoT).⁸

Strategically located in the Asia-Pacific, Taiwan provides quick access to key markets. It takes less than three hours by air from Taipei to reach Tokyo, Seoul, Beijing, Shanghai, Hong Kong, and Singapore, while the Port of Kaohsiung efficiently links major regional hubs within 53 hours by sea. This geographic advantage has made Taiwan a top choice for multinational companies establishing their Asia-Pacific headquarters.⁹

Foreign direct investment highlights this attractiveness. From January to July 2025, Taiwan approved 1,246 FDI projects worth USD 7.8 billion. Since 1952, more than 72,000 projects have been registered, with inflows totalling nearly USD 235 billion. The country also ranks 4th in the 2024 Index of Economic Freedom and 8th globally in competitiveness, supported by strong intellectual property protections and robust infrastructure.⁹

Taiwan’s workforce adds further appeal. The working population includes nearly 10 million individuals, with 38% holding a university degree. Over 300,000 graduates enter the labour market annually, ensuring access to skilled talent in technology, services, and commerce.⁹

For businesses planning expansion, the process typically involves:¹¹

1. Conducting market research to assess industry opportunities
2. Choosing a legal entity and company name
3. Registering with the Ministry of Economic Affairs
4. Setting up tax registration with local authorities
5. Consulting professional advisors for tax compliance and planning

All of this makes Taiwan a strong choice for companies that want to grow in Asia. Doing Business in Asia 2025 requires careful evaluation of location, skilled workforce, and open market to give businesses an excellent base to expand across the Asia-Pacific region.

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Incorporation of Business in Taiwan

To set up a company in Taiwan, foreign investors must register with the Administration of Commerce, Ministry of Economic Affairs (MOEA). The process involves several key documents and approvals to ensure compliance with local regulations:¹²

• Application letter (original)
• Investment approvals: Foreign or mainland investment approval and capital remittance approval issued by the MOEA’s Department of Investment Review
• Special licenses: Approval letters from competent authorities if the business requires specific permissions
• Articles of Incorporation: Includes company name, business scope, shareholder details, capital contributions, profit/loss distribution, and head office/branch information
• Shareholder(s) Agreement: Governs shareholder rights, governance, dividend policies, and transfer of shares
• Consent to Act as Director: Formal acceptance from directors appointed to the board
• Identification documents: Required for directors and shareholders
• CPA Power of Attorney and Capital Audit Report: Confirms capital verification by a certified public accountant
• Registration fee: 1/4000 of authorised capital, with a minimum of NT$1,000

Types of Business Entities in Taiwan

Under the Taiwan Company Act, several structures are available:¹⁰

• Company Limited by Shares: The most common form is dividing capital into shares. Liability is limited to subscribed shares. Close companies (with fewer than 50 shareholders) enjoy additional flexibility under Article 356-1.
• Limited Company: Formed by one or more shareholders, each liable only to the extent of their capital contributions.
• Branch Office: A foreign company’s extension in Taiwan, not an independent legal entity, but able to conduct full operations.
• Representative Office: Suitable for non-revenue activities such as market research, signing contracts, or bidding. It is not a legal entity.

Foreign investors should consider how tax rules, such as quarterly payments and residency requirements, apply to their chosen entity. Working with a corporate tax advisor at the start can ensure that incorporation decisions support long-term tax planning and cost management. Companies can establish a strong base in Taiwan by selecting the right business structure and meeting MOEA requirements while keeping their tax and operational responsibilities efficient.

International corporate tax best practices

Managing corporate tax obligations across multiple jurisdictions requires a strategic approach that balances compliance with efficiency. International businesses should prioritise understanding local tax laws and maintaining accurate records to avoid costly penalties and ensure smooth operations.

Establish robust compliance procedures by working with qualified local tax advisors who understand Taiwan's specific requirements and can help navigate complex regulations. Regular reviews of your tax position and proactive planning can help identify opportunities for legitimate tax optimisation whilst ensuring full compliance with local laws.

Consider the impact of double taxation treaties when structuring your international operations. Taiwan has comprehensive tax treaties with numerous countries, which can help reduce withholding taxes on dividends, royalties, and interest payments between treaty partners.

Maintain detailed and transparent financial records that can withstand scrutiny from tax authorities. Digital record-keeping systems that integrate with your accounting software can streamline compliance processes and provide the documentation needed for tax filings and potential audits.

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Taiwan efficient and simple. It's the one account for managing your money globally.

With a Wise Business account, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.

• Get paid like a local: Use local account details for 8+ major currencies to easily receive payments from customers or investors.

• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.

• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.

• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from paying your first registration fee to receiving international payments and managing your global treasury.

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FAQs - Corporate tax in Taiwan

Who is liable for corporate tax in Taiwan?

All companies incorporated in Taiwan are liable for corporate income tax on their worldwide income, with taxable income above NT$120,000 taxed at 20% and income up to NT$120,000 exempt. Foreign companies with a permanent establishment (PE) in Taiwan are taxed only on Taiwan-sourced income attributable to the PE at 20%. Non-resident companies without a PE are generally not subject to corporate tax, but withholding tax applies on certain types of Taiwan-sourced income, such as dividends, interest, royalties, and service fees.

Are there any tax incentives for businesses in Taiwan?

Yes, Taiwan offers several tax incentives to encourage investment and innovation. The Statute for Industrial Innovation provides tax credits for research and development activities, with companies able to claim up to 15% of qualifying R&D expenditure as a tax credit. Additionally, companies investing in smart machinery or 5G technology can benefit from accelerated depreciation allowances. Foreign companies establishing regional headquarters or operational headquarters in Taiwan may qualify for preferential tax treatment under specific programmes.

What is the tax treatment of dividends in Taiwan?

Dividends paid by Taiwan companies to resident shareholders are subject to Taiwan’s integrated tax system, under which the corporate tax already paid may be credited against the shareholder’s personal income tax. Dividends paid to non-resident shareholders are generally subject to 21% withholding tax, which may be reduced under applicable double taxation treaties. This system coordinates corporate and shareholder taxation to prevent excessive double taxation.

What is the process for registering for corporate tax in Taiwan?

Companies must register for corporate income tax as part of their business registration process with the Ministry of Economic Affairs. This involves obtaining a unified business number (UBN) and registering with the local tax office within 15 days of commencing business operations. Foreign companies establishing a branch office must also complete additional registration requirements and appoint a local tax representative if they don't have a permanent establishment in Taiwan.

What are the common pitfalls to avoid regarding corporate tax in Taiwan?

Common mistakes include failing to understand the distinction between Taiwan-sourced and foreign-sourced income, which affects tax liability calculations. Many businesses also underestimate the importance of maintaining proper documentation for transfer pricing, particularly for transactions with related entities. Another frequent issue is missing provisional tax payment deadlines, which can result in penalties and interest charges. Companies should also be aware that certain expenses may not be deductible for tax purposes, such as entertainment expenses exceeding prescribed limits or fines and penalties paid to government authorities.

Sources used in this article:

1. PwC Tax Summaries: Taiwan Corporate Income Taxes
2. Tax Foundation: Corporate Tax Rates by Country 2024
3. PwC Tax Summaries: Taiwan Tax Administration
4. Financial Supervisory Commission (FSC): Laws and Regulations
5. Ministry of Finance (MOF): Tax Legislation
6. Taipei National Tax Administration (NTA): Tax Services
7. Acclime Taiwan: Corporate Compliance Requirements
8. U.S. Department of State: 2024 Investment Climate Statements - Taiwan
9. Invest Taiwan: Official Website
10. International Bar Association (IBA): Doing Business in Asia Pacific 2025 - Taiwan
11. Invest Taiwan: Investment Status and Trends
12. Taipei City Office of Commerce (TCOOC): Company Establishment

Sources last checked 02/10/2025