Taiwan: Guidance on capitalization of expenses, foreign tax credits, controlled foreign company rules
Guidance issued by the National Taxation Bureau
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October 9, 2025
The National Taxation Bureau recently issued the following tax-related guidance:
- Repair expenses with respect to real estate, plant, and equipment exceeding NT$80,000, and that increase the original asset value or have benefits lasting more than two years, must be treated as capital expenditures.
- Taxpayers cannot claim a foreign tax credit for overpaid foreign taxes if they arise from an income tax treaty country where they are tax-exempt; overpaid foreign taxes due to non-compliance with treaty benefits cannot be credited against the taxpayer’s tax liability in Taiwan.
- A controlled foreign company’s (CFC's) earnings below NTD 7 million are exempt, but combined earnings of all CFCs under the same enterprise (prorated for CFCs operating less than a year) in excess of that are subject to taxation under Article 43-3 of the Income Tax Act.
For more information, contact a KPMG tax professional in Taiwan:
Vincent Lin | vincentlin@kpmg.com.tw