Taiwan: Guidance on income tax withholding, non-withholding tax statements, tax calculation for foreign enterprises

Guidance from the Ministry of Finance

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December 23, 2024

Taiwan’s Ministry of Finance has released guidance on the income tax withholding system, submission of non-withholding tax statements, and tax calculation for foreign enterprises.

  • Optimized income tax withholding system: The implementation of an optimized income tax withholding system will be effective January 1, 2025. Key changes include shifting the responsibility for withholding tax from individuals to the entities themselves. Additionally, deadlines for tax payments and submissions will be extended during consecutive holidays, and penalties for non-compliance will be amended.
  • Non-withholding tax statements submission: Non-withholding tax statements for exempt payments must be submitted to the National Taxation Bureau by the end of January each year. If three national holidays occur consecutively in January, the deadline would be extended to February 5. Non-compliance will incur penalties, although voluntary submission can mitigate penalties.
  • Tax calculation for foreign enterprises: Foreign profit-seeking enterprises can apply to use the net profit ratio and domestic profit contribution ratio to calculate taxable income and withholding tax prior to receiving remuneration for services or business profits from Taiwan. This initiative aims to simplify tax calculations and reduce the burden of tax refunds for foreign enterprises and domestic buyers.


For more information, contact a KPMG tax professional in Taiwan:

Robin Huang | rhuang3@kpmg.com.tw

Sue Shih | sueshih@kpmg.com.tw

Michael Huang | mhuang9@kpmg.com.tw

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