Running a business means keeping track of many deadlines, and tax season is always one of the most important. For companies in Taiwan that operate on a calendar fiscal year, the next major milestone is approaching: from September 1 to September 30, 2025, businesses must file and pay their preliminary installment of profit-seeking enterprise income tax.
While this requirement may sound complicated, the rules are actually straightforward once you break them down. In this guide, we’ll explain how the preliminary installment is calculated, who must pay, what payment options are available, and which businesses are exempt. By the end, you’ll have a clear roadmap for handling your company’s obligations this September.
How to Calculate and File the Preliminary Installment Tax
The preliminary installment is essentially a prepayment of your company’s annual income tax. Instead of waiting until the end of the fiscal year, the government requires businesses to pay part of their tax in advance, helping smooth out both government revenue and business cash flow planning.
1. Standard Calculation
Most businesses will follow this method.
1. Basic Rule
The installment is set at half of your 2024 tax liability, based on your final settlement filed earlier this year. Certain types of income are excluded, such as:
- Real estate income
- Land transactions
- Building usage rights
- Pre-sale housing units
- Related investments
These must be handled separately under Article 24-5 of the Income Tax Act.
2. Applying Tax Credits
After subtracting eligible tax credits—such as investment incentives, relief, and withholdings—you simply need to pay the balance. If you make payment directly, you may be exempt from filing a separate form, which reduces paperwork.
2. Estimated Calculation for Special Cases
Certain businesses may adopt an alternative method if they meet the requirements.
1. Eligible Businesses
Companies, cooperatives, medical social welfare organizations, and limited partnerships not covered under Article 23-1 of the Statute for Industrial Innovation.
These entities must also meet at least one of the following conditions:
- Maintain proper accounting records
- Use the blue return form (Article 77 of the Income Tax Act)
- Have their statements audited by a certified public accountant
2. Calculation Method
The preliminary installment may also be estimated based on the actual income earned during the first half of 2025. This method is particularly beneficial for businesses with highly fluctuating income, as it helps prevent the risk of overpayment. However, it is important to note that if any income from real estate or related investments was earned in the first half of the year, it must still be included in the calculation and properly reported.
Who Is Exempt from Filing or Payment?
Not every business needs to participate in this round of filing. The following are key exemptions:
- Foreign entities without permanent establishments in Taiwan, provided tax is already withheld by their agents or payers.
- Sole proprietorships, partnerships, and small-scale businesses approved to use simplified invoices.
- Entities legally exempt under the Income Tax Act or other laws.
- Companies that have dissolved, merged, or transferred during this period (these businesses file a final settlement instead).
- Newly established businesses in 2025, or those with zero tax liability in 2024.
- Cases where the preliminary installment, calculated as half of last year’s liability, amounts to NT$2,000 or less.
- Eligible non-profit, educational, cultural, and welfare organizations, auxiliary operational units, lawful retail cooperatives, and state-owned enterprises.
- Other entities officially approved for exemption by the Ministry of Finance.
- These rules are designed to ease the burden on very small businesses, new ventures, or organizations already fulfilling public-service roles.
Practical Tips for a Smooth Filing Process
Even if your business is familiar with the process, a few reminders can make the experience more efficient:
- Go digital-
Online filing not only saves time but also reduces human errors and helps you avoid long lines at banks. - Prepare early-
Don’t wait until the last week of September to calculate and confirm your tax liability. Having documents ready in advance will prevent rushed mistakes. - Check exemptions carefully-
Some businesses overpay simply because they don’t realize they qualify for exemptions. Reviewing your company’s profile against the criteria may save you money. - Secure your login credentials-
You can apply for a simple e-filing password via the Ministry of Finance’s e-tax portal or use an IC card certificate from the Ministry of Economic Affairs. Both methods ensure secure and quick access to the online system. - Keep records-
Retain all payment receipts and filing confirmations, as these may be needed for year-end reconciliation or future audits.
Why the Preliminary Installment Matters
Some business owners view the preliminary installment as an extra burden, but it plays an important role in the overall tax system. By collecting part of the income tax in advance, the government reduces the risk of large unpaid balances at year-end. For businesses, it can serve as a cash flow management tool—spreading the tax obligation across the year instead of facing one large payment after final settlement.
Furthermore, the preliminary installment provides an opportunity to review your business’s financial health halfway through the year. If your income has significantly changed compared to the previous year, using the estimated calculation method may help align your tax payments with your actual performance, preventing overpayment or underpayment.
Conclusion
The September 2025 preliminary income tax filing is more than just another deadline—it’s a chance for businesses to demonstrate compliance, manage their tax obligations proactively, and avoid penalties. Whether you qualify for exemptions, use the standard calculation, or choose the estimated approach, understanding the rules will save you both time and stress.
With online filing tools, flexible payment methods, and clear exemptions, the process has become more business-friendly than ever. As long as you prepare early and keep good records, meeting this requirement should be a smooth part of your company’s financial routine.