Taxes in Taiwan

The 2015 Tax Rates Levied in Taiwan
The 2015 tax rates in Taiwan are relatively difficult to understand. Taiwanese tax authorities use a progressive income tax structure for individuals, but a separate profit-seeking enterprise income tax system for businesses.
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The National Taxation Bureau of the Central Area of the Ministry of Finance doesn’t allow taxpayers to receive any sort of extension when filing their taxes.Taxes in Taiwan

Individual Income Tax Rates

Taiwanese residents and foreigners living in Taiwan are taxed at the same rates. A progressive tax system is in place that places high-income earners in stricter brackets. The 2015 Taiwan Tax Brackets are as follows:

  • Individuals making up to NT$520,000 are accessed at a 5 percent tax rate.
  • Those making between NT$520,001 and NT$1,170,000 pay 12 percent in taxes.
  • People who make between NT$1,170,001 and NT$2,350,000 have to pay 20 percent of their income in taxes.
  • People who make between NT$2,350,001 and NT$4,400,000 have to pay 30 percent of their income in taxes.
  • Anyone who makes more money than this is taxed at a 40 percent rate.

A couple of changes were made in 2015 that make this system slightly more complex. The number of tax brackets was reduced from six to five, but there’s now a special tax outside of the bracket structure on income made over a ceiling of NT$10,000,000 that has to be paid at a 45 percent rate.

Business Tax Rates
A separate profit-seeking enterprise income tax is accessed on businesses. Sole proprietors file a single return, but partners are supposed to file separately. People who own their own business will also be responsible for individual income taxes. Anyone who runs a business that makes less than NT$120,000 isn’t responsible for paying this tax. Those who make more than that have to pay at a rate of 17 percent, unless the amount of tax exceeds half of the taxable amount in excess of the NT$120,000 ceiling. Owners of small businesses who report some of their income on their individual tax returns can use this to potentially reduce the tax bill that they owe when it comes time to file for their business. They will still generally owe some money, however.

Transaction Tax Boxes
Both business and individual income tax filers will also find that there’s a line on their tax form for securities transaction taxes. This tax is levied at 0.3 percent of the gross proceeds from the sale of any securities listed on a Taiwanese exchange. This means that those who incurred heavy losses in the stock market will still be responsible for paying taxes on whatever money they were able to receive back.

Corporate bond profits are taxed at a rate of 0.1 percent of gross proceeds, but the government currently has placed an exemption on any bond that’s sold before the end of 2016. People who have profits from previous years will still have to report this gross income on their 2015 tax return, however, and they’ll be responsible for paying the 0.1 percent tax plus any relevant penalties.