AMENDMENT OF TAIWAN INCOME TAX LAW

Amendment of Taiwan income tax law of 2018 financial year

Taiwan government has announced the new amendment of Income Tax Law. The amendment is deemed to simplify tax calculation, and make a fair environment for citizens.
The amendment will be effective begin with financial year 2018, and here is the summery related to foreign investment company.

1. Repeal the Dividend imputation credit. Corporations do not need to calculate Dividend imputation credit and filing the result to tax authority every year. However, the distributed dividend will no longer include a tax credit.
2. Business income tax increase from 17% to 20%.  For the entity has annual taxable income less than 500,000 TWD, the original 17% tax rate will be increased by 1%  every year, until the tax rate reaches 20%.
3. The tax of aggregate amount of undistributed earnings decrease from 10% to 5%. 
4. Dividend income tax rate of non-resident taxpayer increase from 20% to 21%. .

Those amendments might change the retain earning distribution policy for a foreign investment corporation.

Should you have any question, do not hesitate to contact us for further consultation. ​