Taxes and Accounting in Taiwan

Overview by Globlatrade.net:

Accounting Rules

Tax Year
The fiscal year begins on January 1st and ends on December 31st of the same year.
Accounting Standards
Taiwan's accounting principle follows the accounting standards promulgated by the International Accounting Standards Board (IASB).
Accounting Regulation Bodies
Directorate-general of budget, accounting and statistics.
Accounting Reports
The Financial Accounting Standards Committee has been deliberating on the revised draft since May 22, 2008. The revised Statement which is equivalent to IFRS 8 is expected to be finished in 2009.
Consult the website of Accounting research and development foundation in Taiwan.
Publication Requirements
Each company has to produce a balance sheet and a profit and loss account for each accounting year.
Professional Accountancy Bodies
The Department of Accounting
Certification and Auditing
A Taiwan company with paid-in capital equal to or exceeding NTD 30 million must have a statutory audit financial statement. For more information, you can contact the Accounting research and development foundation in Taiwan.
Accounting News
Accounting research and development foundation in Taiwan.

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Tax Rates

Consumption Taxes

Nature of the Tax
VAT.
Tax Rate
The VAT rate is 5% flat.
Reduced Tax Rate
The tax rate that applies to banks, insurance companies, trust and investment companies, securities traders, futures traders, bills finance companies, and pawnshops (except reinsurance premium income, for which the rate is 1%) is 2%. Export sales and export-related services are subject to zero tax rate.
More information on Invest in Taiwan (investment guide).
Other Consumption Taxes
Special Business tax, etc. More information in the 2009 PKF guide on Taiwan.
 
Find Tax Professionals in Taiwan on GlobalTrade.net.
 

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Corporate Taxes

Company Tax
Progressive rate
Tax Rate For Foreign Companies
Resident and non-resident companies are charged in the same way concerning taxation. They're charged on worldwide income generated in Taiwan. If a person resides in Taiwan less than 90 days in a year, the tax rate will be 20%.
Over 90 days, the tax rate is the normal tax rate for local residents, no matter whether Taiwanese or foreigners.
Capital Gains Taxation
Capital gains are taxed in the same way as ordinary income.
Main Allowable Deductions and Tax Credit
Consult the PKF 2009 Tax guide.      
Other Corporate Taxes
Real Property Tax (Land Value Tax) of 1 to 5.5%; Deed Tax is imposed on the transfer of real estate at tax rates varying from 2% to 6%.

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Individual Taxes

Tax Rate

Individuals income tax Progressive rate from 6% to 40%.
From NTD 0 to 410,000 6%
From NTD 410,001 to 1,090,000 13%
From NTD 1,090,001 to 2,180,000 21%
From NTD 2,180,001 to 4,090,000 30%
Beyond NTD 4,090,001 40%
Allowable Deductions and Tax Credit
Medical care and insurance allowances, Losses of goods due to natural disasters and Loans interests paid for the purchase of the main home are often deductible. Non-residentsare not entitled to personal exemptions or deductions.
For additional information consult the 2009 Taiwan Tax Guide of  PKF.
Special Expatriate Tax Regime
For non-residents, income tax is computed on a gross basis and tax is collected via withholding, at a progressive rate of up to 40%.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of the 17 Tax treaties signed by Taiwan
Withholding Taxes
Dividends: 20%; Interest: 10%; Royalties: 15% and 20% on royalties paid to non residents.

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Sources of Fiscal Information

Tax Authorities
Department of Taxation
Other Domestic Resources
Invest in Taiwan
Ministry of economic affairs.

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Find more on GlobalTrade.net about Taxes and Accounting in Taiwan.
 

Intellectual Property

National Organizations
In order to register a patent, a trademark or a technical design, it is necessary to present it beforehand to The Intellectual Property Office and apply to an expert in Taiwanese patents recognized by the authorities.
Regional Organizations
Chinese Intellectual Property Protection Association.
 

National Regulation and International Agreements

 
Type of property and law Validity International Agreements Signed
Patent
 
Patent Act
20; 12 or 10 years
Trademark
 
Trademark Act
10 years Nice agreement
Design
 
Patent Act
12 years.  
Copyright
 
Copyright Act
The life of the author and fifty years after the author's death.
Industrial Models
 
 

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Legal Framework

Independence of Justice
The judiciary in Taiwan is largely independent, and trials are public and generally fair. Foreigners can be guaranteed an impartial trial from the country?s judicial system.
But Taiwan is not completely free from corruption (it particularly exists in country?s police force and judiciary): vote buying is a common practice at the time of elections and political and organized crime exits in the country.
Equal Treatment of Nationals and Foreigners
Foreigners can be guaranteed an impartial trial from the country's judicial system.
The Language of Justice
The judicial language used in the country is Mandarin Chinese, having an interpreter is possible.
Recourse to an Interpreter
Having an interpreter is possible.
Sources of the Law and Legal Similarities
Taiwanese Law today is mainly based on the civil law system.
Checking National Laws Online
Taiwanese legal research guide
 
Find Legal Experts in Taiwan on GlobalTrade.net.
 

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Standards

National Standards Organizations
Bureau of Standards
Integration in the International Standards Network
In an effort to enhance industrial competitiveness, maintain fair trade, and protect consumers as well as ensuring sustainable economic development, the Bureau of Standards, Metrology and Inspection under the Ministry of Economic Affairs has been dedicated to promoting standardization, metrology and inspection systems in line with international practices.
Bilaterally, the BSMI has concluded cooperation arrangements with 30 organizations of 23 countries. More information on the Bureau of standards website.
Online Consultation of Standards
Bureau of standards website.
Certification Organizations
Bureau of standards

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Business Practices

General Information
Communicaid
Executive Planet
Opening Hours and Days
Shops are usually open every day and close at 10 pm. Banks are open from 9 am to 3h30 pm, Monday to Friday. Companies generally they work from 9 am to 6 pm, Monday to Friday.
 

Public Holidays

Chinese Lunar New Year January or February
Peace Memorial Day February 28th
Tomb Sweeping Day April 5th
Labor Day May 1st
Dragon Boat Festival In Chinese Lunar calendar: May 5th
Moon Festival In Chinese Lunar calendar: August 15th
National day October 10th
 
 

Periods When Companies Usually Close

Chinese New Year 1 week in January or February.
 

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