Taiwan taxes residents on worldwide income (subject to an Alternative Minimum Tax capturing certain foreign-source income for individuals) and non-residents on Taiwan-source income only. Taiwan operates a self-assessment system, with the National Taxation Bureau conducting post-filing review.
The Taiwanese tax year is the calendar year. The individual filing deadline is generally 31 May of the following year; the corporate filing deadline is generally 31 May as well for calendar-year filers.
Taiwan's headline corporate income tax (CIT) rate is 20%.
The headline personal income tax (PIT) rate is residents 40%; non-residents 18/20/21 by income type.
The standard VAT/GST (or equivalent consumption tax) rate is 5% (general industries).
Under Article 7 of the Income Tax Act, an individual is a Taiwan tax resident if they have a domicile (household registration) and habitually reside in Taiwan, or if they lack domicile but reside in Taiwan for more than 183 days in a taxable year. A household-registered individual present less than 31 days with center of vital interests outside Taiwan can be treated as non-resident despite the registration. Taiwan taxes on a territorial basis for regular income tax purposes, but a resident's worldwide income and qualifying CFC income are separately subject to Alternative Minimum Tax.
A non-Taiwanese entity has a Taiwan permanent establishment through a fixed place of business or a dependent agent habitually concluding contracts in Taiwan on the entity's behalf, following the OECD Model Treaty definition as applied under Taiwanese domestic law and any applicable tax treaty.
Taiwan's CFC regime applies where a Taiwan tax resident (individual or entity), alone or with related parties, holds more than 50% ownership (or otherwise exercises significant influence) over a foreign affiliate registered in a low-tax jurisdiction (broadly, a corporate tax rate under 14%, such as the British Virgin Islands or Cayman Islands). Where triggered, the CFC's income is attributed to the Taiwan resident proportional to ownership and holding period, included in current-year taxable income (and, for individuals, folded into the AMT base). Exemptions apply where the foreign affiliate has substantial operating activities in its jurisdiction, or where its current-year earnings fall below a de minimis threshold of TWD 7 million, confirmed as current and unchanged since the CFC regime's 1 January 2023 introduction per Taiwan's National Taxation Bureau of the Northern Area (as recently as a 28 July 2026 clarification notice) and Grant Thornton Taiwan's 2026 CFC fact sheet - if the aggregate positive earnings of all CFCs held by the same Taiwan entity exceed TWD 7 million, each individual CFC's earnings must still be recognized even if that specific CFC's own earnings fall under the threshold.
In principle, a deduction for excess interest expense is denied where a taxpayer's related-party debt exceeds a 3:1 debt-to-equity ratio. Financial-industry companies (banks, financial holding companies, insurers, securities firms) are exempt from this rule.
Taiwan does not use an elective check-the-box classification system; entity classification generally follows the entity's actual legal characteristics. Taiwan does not have a comprehensive ATAD2-style anti-hybrid regime, though Taiwan's own CFC regime (already confirmed elsewhere on this page) addresses related cross-border deferral concerns.
No foreign bank account or foreign financial asset reporting regime exists requiring residents to separately disclose foreign accounts; foreign income is reported through the standard annual tax return.
Taiwan does not provide a broad participation exemption for foreign dividends in the European sense; relief from double taxation is available through Taiwan's foreign tax credit system, with coordination against Taiwan's own CFC regime to avoid double-counting attributed profits.
Taiwan has a real foreign tax credit regime available to both individuals and companies for foreign tax paid on foreign-source income also taxed in Taiwan, capped at the Taiwanese tax otherwise due on that income.
Taiwan has entered into double tax treaties/agreements with 35 countries and jurisdictions. Reflecting Taiwan's unique international status (the US does not have Article II treaty-making authority with Taiwan), Taiwan has no comprehensive tax treaty with the United States. A proposed statutory fix, the United States-Taiwan Expedited Double-Tax Relief Act (H.R.33/S.199, addressing withholding tax reduction, permanent establishment rules, and employment income via a new Internal Revenue Code Section 894A), passed the US House by a 423-1 vote in January 2025, but as of the most recent available information (June 2026) remains pending in the Senate and has not been enacted; its benefits are conditioned on a reciprocal agreement with Taiwan once passed. Confirm current status directly, since this is genuinely still-pending federal legislation rather than a settled matter.