Tax laws Taiwan
Taiwan's taxation system is structured to support both national and local government revenues, encompassing a variety of taxes administered by different authorities.
1. Tax Administration:
National Taxes: Managed by the Ministry of Finance, national taxes include income tax, business tax (value-added tax), and securities transaction tax.
Local Taxes: Municipalities and counties oversee local taxes such as land value tax, house tax, and vehicle license tax.
2. Individual Income Tax:
Residency Definition: Individuals residing in Taiwan for 183 days or more within a taxable year are considered residents for tax purposes.
Progressive Tax Rates: For the 2017 tax year, rates ranged from 5% to 45%, increasing with higher income brackets.
3. Corporate Income Tax:
- Profit-Seeking Enterprise Income Tax: Enterprises with taxable income above NT$120,000 are taxed at 17%, with the tax payable not exceeding half of the amount exceeding this threshold.
4. Value-Added Tax (VAT):
- VAT Rate: As of June 1, 2023, the standard VAT rate is 5%.
5. Securities Transaction Tax:
- Tax Rates: A 0.3% tax is levied on the gross proceeds from the sale of shares, while a 0.1% rate applies to corporate bonds, with certain exemptions.
6. Real Estate Taxes:
- Luxury Tax: Implemented in June 2011, this tax imposes a 15% sales tax on properties sold within one year of purchase and a 10% tax for sales between one and two years of ownership.
7. Uniform Invoice Lottery:
- Purpose: To encourage honest reporting of sales and tax payments, Taiwan operates a uniform invoice system with a bi-monthly lottery offering prizes up to NT$10 million.
Recent Developments:
- Double Taxation Agreement Discussions: In October 2024, the U.S. and Taiwan announced plans to initiate talks to eliminate double taxation for companies operating in both regions, aiming to enhance bilateral investment, particularly in the semiconductor industry.
For comprehensive and current information, it's advisable to consult the Ministry of Finance or a tax professional, as tax laws and regulations are subject to change.
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