Understanding the New Tax Regulations for the 2024 Tax Year in Taiwan: What Taxpayers Need to Know 

In 2025, the Ministry of Finance in Taiwan has introduced several key updates to the income tax filing process. These changes are aimed at easing the financial burden on households, adjusting allowances and deductions, and updating methods for calculating property transaction income. Whether you’re an individual taxpayer, a business owner, or a tax professional, understanding these changes will be crucial for ensuring accurate and timely tax filing.

A Guide to Business Income Tax Filing: Essential Knowledge for Entrepreneurs

As May approaches, tax filing season begins. If you’ve recently started a business, terms like Business Income Tax and Business Tax may seem confusing. Filing taxes correctly is crucial for compliance and financial health. This guide explains what Business Income Tax is, how to file it, and how it differs from Business Tax.

Maximizing Tax Efficiency for Profit-Seeking Enterprises: Essential Strategies for Business Growth (Part 2)

In the previous article, we discussed essential tax-saving strategies such as selecting the optimal business structure, reporting deductible expenses, choosing the right inventory valuation method, estimating allowances for bad debts, and depreciation techniques. In this follow-up, we’ll explore advanced strategies, diving into areas like managing assets, leveraging tax treaties, and utilizing investment credits. These insights will help businesses maximize tax benefits and maintain compliance.

Taiwan Business Tax on Cross-Border Electronic Services: Key Insight 

As the digital economy continues to expand, Taiwan has implemented specific measures to ensure fair taxation of cross-border electronic services. Since May 1, 2017, the Ministry of Finance (MOF) in Taiwan has required foreign providers of electronic services to comply with business tax regulations. These rules aim to create a level playing field between domestic and international service providers while ensuring the government’s ability to generate revenue from the digital economy. Businesses and consumers engaged in digital transactions with overseas companies now operate under a structured framework, promoting transparency and consistency in taxation.

Withholding Tax for Electronic Services and Royalties: Key Regulations and Compliance in Taiwan 

With the increasing frequency and diversity of cross-border transactions, the demand for procuring electronic services from abroad has only surged, particularly due to the acceleration of digital transformation during the COVID-19 pandemic. Payments made to foreign companies for services provided to Taiwanese businesses via the internet or other electronic methods are generally regarded as Taiwan-sourced income and are therefore subject to tax withholding.

Foreign companies earning income from providing services through online or other electronic methods may apply to the tax authority for approval of the applicable net profit ratio and the domestic contribution percentage, then used to calculate taxable income and withholding tax. If the applicable net profit ratio multiplied by the domestic contribution percentage exceeds 15%, and the provided services meet the criteria of Article 25 of the Income Tax Act regarding technical services, the foreign companies may also apply to calculate withholding tax based on 15% of revenue from Taiwan.

Furthermore, if the foreign company’s country has signed a Tax Treaty with Taiwan, the income derived from such services may, under qualifying conditions, be eligible for exemption as business profits. These are currently common methods to effectively reduce the actual withholding rate for cross-border electronic services.