Taiwan's Ministry of Finance (MOF) has been taking action to tackle tax avoidance in the country and BEPS has been part of the MOF's guiding framework.
Taiwan is not formally participating in the automatic exchange of information under BEPS. However, to improve tax transparency, the MOF has amended its tax collection laws to take into account the exchange of tax-related information between Taiwan and other countries. This also prevents Taiwan from being categorised as a non-cooperative jurisdiction by other countries or the OECD. The amendments include the reciprocal information exchange agreements with other jurisdictions and scope of information exchanges. Taiwan has signed 32 tax agreements with other jurisdictions that contain a provision on exchange of information.
While the MOF's actions are motivated by compliance with the BEPS project, information about Taiwanese tax affairs in the Panama Papers has also contributed to spurring the government into action. The 2016 revelations included the financial transactions of Taiwan's Mega Commercial International Bank. This resulted in the bank being penalised with a fine by Taiwan's Financial Supervisory Commission.
To address tax avoidance by businesses and individuals, the Taiwanese government has implemented two anti-avoidance tools: controlled foreign company (CFC) regulations and place of effective management (PEM) rules. However, in consideration of the impact on Taiwanese businesses, the MOF decided that the date of the implementation for the CFC and PEM rules will be conditional on the effective date of a tax agreement between Taiwan and China and the status of the common reporting standard, among other things.
The MOF has indicated that it will amend its TP regulation to mirror BEPS Action 13 for the preparation of the master file and country-by-country reporting. An announcement regarding the timeframe for implementation is expected in the near future. The Taiwanese government is also trying to speed up TP audits, focusing on foreign-owned enterprises.
National Taxation Bureau of Taipei
No 2, Section 1, Jhonghua Road, Wanhua District, Taipei 10802
Tel: +886 2 2311 3711 ext. 1116
Fax: +866 2 2389 1052
Taxation Agency, Ministry of Finance
2, Aiguo W. Road, Taipei, 10066
Tel: +886 2 2322 8000
Fax: +866 2 2396 9038
(As of August 2017)
|Corporate income tax rate||17%|
|Capital gains tax rate||17% (a)|
|Branch tax rate||17%|
|Paid to residents||0%|
|Paid to non-resident corporations and individuals||20% (b)|
|Paid to resident corporations||10% (c)|
|Paid to resident individuals||10% (d)|
|Paid to non-resident corporations and individuals||15/20% (e)|
|Paid to resident corporations and individuals||10% (f)|
|Paid to non-resident corporations and individuals||20%|
|Branch remittance tax||0%|
Net operating losses (years)
Source: EY 2017 Worldwide Corporate Tax Guide and Deloitte