Taiwan Corporate Income Tax Guide (2026)

Taiwan taxes company profits under the profit-seeking enterprise income tax (營利事業所得稅), usually called corporate income tax (CIT). The same rules apply to a limited company (有限公司), a company limited by shares (股份有限公司) and the Taiwan branch of a foreign company (外國公司台灣分公司). This guide explains how the tax is calculated, when it is filed, and the points foreign investors most often ask about.

Law as of 12 October 2026.

At a glance

Who pays and on what income

A company whose head office is in Taiwan is taxed on its worldwide income. Foreign income tax paid on foreign income can be credited against Taiwan tax, but only up to the extra Taiwan tax caused by including that income, and only with a tax certificate from the foreign tax authority that has been authenticated by a Taiwan representative office.

A foreign company is taxed only on its Taiwan-source income. The Income Tax Act lists what counts as Taiwan-source, for example remuneration for services performed in Taiwan, royalties for use of rights in Taiwan, and profits from business carried on in Taiwan. How that tax is collected depends on whether the foreign company has a branch, a business agent or no presence in Taiwan (see Paying foreign companies below).

Tax rate and the NT$120,000 threshold

The rate is 20% of taxable income. Two rules apply at the bottom of the scale:

• Taxable income of NT$120,000 or less is exempt.
• Above NT$120,000, the tax is 20% of the whole taxable income, but it may not exceed half of the amount above NT$120,000.

The cap only makes a difference between NT$120,001 and NT$200,000. From NT$200,000 upward, the tax is simply 20%.

Hypothetical figures.

Taxable income is not the same as accounting profit. Companies keep books under Taiwan accounting standards (IFRS for public companies), and the tax return adjusts the accounting result for tax rules: some income is excluded, some expenses are capped or disallowed. Tax offices audit returns under detailed audit rules (營利事業所得稅查核準則).

What income is taxable

See Tax on land and house transactions for property, and Taiwan’s CFC rules for foreign subsidiaries.

Deductions with limits

Expenses must relate to the business and be supported by proper evidence, such as a Government Uniform Invoice (GUI). Some common expenses have limits:

• Entertainment is deductible only up to a percentage of revenue. For a service business filing an ordinary return, the limit is 1% of the first NT$9 million of revenue, 0.6% of revenue between NT$9 million and NT$45 million, and 0.4% above that. Companies with a CPA-certified return get higher limits (1.2%, 0.8% and 0.6%).
• Donations to qualifying charities are deductible up to 10% of income. Donations to government and national defence are not limited.
• Interest on related-party loans is not deductible above a 3:1 debt-to-equity ratio. See Related-party interest deduction limits.
• Head-office costs charged to a branch are deductible only with specific documents. See Management expenses shared by the head office.
• Commissions and agency fees need evidence that meets the audit rules. See Deducting commissions and agency fees.

Tax year, annual return and payment

• Tax year: the calendar year. A company can use another 12-month period, for example to match its parent’s year-end, if the tax office approves it.
• Filing and payment: the annual return is filed 1–31 May for the previous year. The company calculates the balance of tax itself and pays it before filing. A company with a July–June year files 1–30 November.
• Holidays: if the last day is a holiday, the deadline moves to the next working day. For tax year 2025 the deadline was 1 June 2026, because 31 May was a Sunday.
• E-filing: most companies file and pay through the Ministry of Finance online filing system.
• No extension: there is no extension of the filing deadline. A company hit by a natural disaster, force majeure or financial hardship can apply to pay in instalments or later, for up to 3 years (Tax Collection Act, Article 26).

The same return also carries the income basic tax computation and the surtax return on undistributed earnings for the year before last.

Provisional tax in September

Between 1 and 30 September, a company pays provisional tax equal to half of the tax payable on last year’s annual return. It is credited against the tax on the next annual return. If the company does not use any tax credits to reduce the amount, paying the tax is enough and no return needs to be filed.

A company that keeps complete books and files a CPA-certified return may instead calculate provisional tax from its actual results for January to June, which helps when this year is weaker than last year.

In practice no provisional tax is due if, for example:

• the company is in its first year, or had no tax payable last year;
• half of last year’s tax is NT$2,000 or less;
• the company is a foreign enterprise with no fixed place of business in Taiwan whose tax is withheld at source.

Late payment by 31 October carries interest from 1 October. After that, the tax office assesses the amount and sets a 15-day payment deadline. See Provisional tax and relief for the half-year calculation and the 2026 relief for businesses affected by US tariffs.

Losses carry forward for 10 years

A loss can be deducted from the net income of the following 10 years. Losses cannot be carried back. The carry-forward is available only if all of the following are met:

• the business is a company (not a sole proprietorship or partnership);
• its books and records are complete;
• the return for both the loss year and the year of deduction is a CPA-certified return; and
• both returns were filed on time.

A loss year without CPA certification cannot be recovered later. If the CPA certification report is not submitted on time, the return is treated as an ordinary return and the loss is lost. This is why many start-ups choose CPA certification from the first year, even when it is not required.

CPA tax certification

CPA tax certification (稅務簽證) means a CPA reviews the return, prepares a certification report, and files it with the return. It is required for:

1. banks, insurers, securities firms and other financial businesses;
2. public companies;
3. companies with tax exemptions under incentive laws and revenue of NT$50 million or more;
4. companies filing consolidated returns (for example under the Financial Holding Company Act or the Business Mergers and Acquisitions Act);
5. any other business with annual revenue (operating plus non-operating) of NT$100 million or more.

A company below these thresholds can choose certification voluntarily. A certified return gets these benefits: the 10-year loss carry-forward, higher entertainment limits, and the January–June option for provisional tax. For tax year 2025, the certification report was due by 30 June 2026.

Tax certification is separate from the Company Act audit of financial statements, which applies to companies above a capital or revenue level set by the Ministry of Economic Affairs.

5% surtax on undistributed earnings

A Taiwan company pays an extra 5% on current-year earnings that it has not distributed by the end of the following year.

The base is the year’s after-tax net income in the financial statements, reduced by:

• prior-year losses offset;
• dividends distributed out of that year’s earnings;
• the legal reserve (法定盈餘公積) set aside under the Company Act;
• reserves required by law, by the regulator or by loan agreements;
• qualifying reinvestment in buildings, equipment or technology within 3 years (minimum NT$1 million).

Distributions and reserves count only if they are made by the end of the following year. The surtax return for year N is filed in May of year N+2, together with that year’s annual return. It must be filed even if the result is zero.

Example (hypothetical):

Before distributing earnings, a company must first set aside 10% as legal reserve until the reserve equals its capital (Company Act, Article 237; Article 112 for limited companies). The Taiwan branch of a foreign company does not pay the surtax, because a branch has no earnings of its own to distribute. For how the surtax compares with dividend tax for different shareholders, see Dividend tax and shareholder structure.

Income basic tax (alternative minimum tax)

The income basic tax (所得基本稅額), also called the alternative minimum tax (AMT), stops companies from using exemptions and incentives to pay too little tax.

• Basic income is taxable income plus items exempt from regular tax, mainly gains on securities and futures, and income exempt under incentive laws. Gains on shares held for 3 years or more count at half.
• Basic tax is (basic income − NT$600,000) × 12%. The NT$600,000 deduction applies for tax year 2026.
• If regular tax is lower than basic tax, the company pays the difference with its annual return.

Many companies are outside the income basic tax, for example those that used no tax credits and have no add-back items, and foreign companies with no fixed place of business in Taiwan.

Global minimum tax: in August 2024 the Ministry of Finance proposed raising the income basic tax rate to 15% for Taiwan members of multinational groups with consolidated revenue of €750 million or more. As of October 2026 the rate remains 12%, and Taiwan has not enacted the OECD Pillar Two rules (IIR, UTPR or a domestic minimum top-up tax).

Branch or subsidiary: the tax differences

Both pay CIT at 20% on their Taiwan income. The difference is what happens when profits go to the foreign owner.

Under a long-standing MOF ruling, branch profits already belong to the head office, so remitting them is not a dividend and no tax is withheld.

Example (hypothetical): Taiwan profit before tax of NT$1,000,000, all available profit paid to the foreign owner

A subsidiary has other advantages, such as limited liability and eligibility for some incentives, so tax is only one factor. See How to set up a Taiwan branch and Reducing dividend withholding through tax treaties.

Paying foreign companies: withholding tax and treaties

When a Taiwan company pays a foreign company that has no fixed place of business or agent in Taiwan, it must withhold tax from the payment. The withheld tax is the foreign company’s final Taiwan tax, and the foreign company files no return. Standard rates:

Ways the tax can be reduced:

• Tax treaty rates: Taiwan has 36 income tax treaties in force, and dividend rates are usually capped at 10% or 15%. See How to apply for tax treaty benefits. The new treaty with Singapore applies from 1 January 2027; see Taiwan–Singapore tax agreement 2027.
• Deemed profit for certain foreign businesses: for international transport, construction contracting, technical services and equipment leasing, the MOF can approve taxing only 10% or 15% of revenue as profit (Article 25). With 20% withholding on that profit, the effective rate is 2% or 3% of the payment. See Withholding tax reduction for foreign service providers.
• Royalty exemption for approved technology licences. See Taiwan royalty tax exemption.

There is no income tax treaty with the United States. A US–Taiwan agreement is waiting for US legislation, so US companies currently pay the standard rates. A treaty exemption can also be lost if staff work in Taiwan long enough to create a permanent establishment; see Treaty exemption and the 183-day service PE. For the wider withholding rules, see Overview of withholding tax in Taiwan, and for VAT on these payments, Tax implications for foreign service providers.

Anti-avoidance rules

Tax incentives

The main incentives are in the Industrial Innovation Statute. Credits reduce CIT payable, not taxable income.

The forward-looking R&D credit is aimed at large companies: it requires R&D spending of at least NT$6 billion, R&D intensity of at least 6% and a minimum effective tax rate. See R&D tax credit in Taiwan for how to apply.

Annual compliance calendar

Dates move for companies with a non-calendar tax year. For the exact dates each year, see the 2026 filing schedule for VAT, company tax and withholding tax and the monthly bookkeeping and tax calendar.

Penalties and the assessment period

Tax fraud can also be a criminal offence. The tax office can assess additional tax within 5 years of an on-time filing, or 7 years if the return was not filed on time or there was fraud. See Penalties for under-reporting income even when no tax is payable.

VAT (business tax)

CIT is a tax on profit. VAT is a separate tax on sales: most sales of goods and services in Taiwan are taxed at 5%, exports and export-related services at 0%, and returns are filed every two months. See VAT and the Government Uniform Invoice, Zero-rated VAT on exported services and VAT-exempt vs zero-rated.

Practical points from Songjer

Foreign-owned companies often run into these problems:

1. File every year, even with a loss. A late or missing return in a loss year means that loss can never be used.
2. Decide on CPA certification in the first year. Without it, early start-up losses usually cannot be carried forward.
3. Plan dividends before the end of the following year. A resolution made after that date does not reduce the 5% surtax.
4. Check the treaty before paying. The treaty rate needs an approval or documents before the payment is made; a refund afterwards is slower.
5. Prepare transfer pricing documents with the return. The tax office can ask for the report at any time after filing, with one month to respond.

Most CIT cost in Taiwan comes from timing and paperwork, not from the 20% rate itself.

Frequently asked questions

Glossary

Law links on this page go to the English translations on the Laws & Regulations Database of the Republic of China (Taiwan). If a translation differs from the Chinese text, the Chinese text prevails.

This guide is general information based on the law as of 12 October 2026. It is not advice for any specific case, and the examples use hypothetical figures.