How corporate tax works in Taiwan
Taiwan taxes resident enterprises on worldwide income at 20%, with the first TWD 120,000 exempt. Non-residents with a local presence file the same way; those without pay by withholding only.
Undistributed earnings attract an extra 5% surtax, pushing retention-heavy structures toward distribution. Controlled foreign companies in low-tax jurisdictions attribute profits yearly since 2023.
Dividends to foreign shareholders face 21% withholding, reduced by the 35 treaties mostly to 10%. Taiwan has no extra branch-remittance tax and no comprehensive US treaty.
Tax rates at a glance
- Corporate rate
- 20%Flat
- Small exemption
- TWD 120,000
- Retained surtax
- 5%
- Dividend withholding
- 21%
- Typical treaty rate
- 10%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
FoundersHolding companiesRegional operatorsInvestorsCross-border groups
Watch out for
- The old 12% retained-earnings figure in some guides is wrong. The surtax has been 5% since 2018 — verify any source still quoting double digits.
- CFC attribution needs holding-ratio and day-count math with ten-year loss carry. Passive offshore subsidiaries no longer park profits silently.
- Thin treaty coverage raises exit costs. With no US comprehensive treaty and only 35 agreements, many payouts suffer full 21%.
- Deemed-profit lanes for transport, construction and tech services tax gross receipts at 10% or 15%. Service contractors should check deemed versus actual filing.
Frequently asked questions
Does Taiwan have corporate tax?
Yes, 20% on enterprise income with the first TWD 120,000 exempt, plus 5% on undistributed earnings.
What withholding applies to dividends leaving Taiwan?
Domestic law withholds 21%, reduced by treaties mostly to 10% with residence documentation.
Do Taiwan CFC rules apply now?
Yes. Enterprise and individual CFC rules have attributed low-tax offshore profits yearly since 2023.