How dividend tax works in Taiwan
Resident individuals choose yearly: fold dividends into consolidated income with an 8.5% credit capped at TWD 80,000 per household, refundable if it exceeds tax, or pay a separate flat 28% with filing still required.
The credit suits modest dividends inside low brackets; the 28% flat suits large payouts that would otherwise meet 30% or 40%. The election locks per year, not per stock.
Dividends to non-residents face 21% withholding, reduced by few treaties mostly to 10%. Interest pays 15% or 20% and royalties 20% without treaties.
Tax rates at a glance
- Credit rate
- 8.50%Capped
- Separate rate
- 28%
- Credit cap
- TWD 80,000
- Outbound 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.
InvestorsHolding companiesFamily officesHigh earnersCross-border shareholders
Watch out for
- The election is annual and total. Mixing credit on some dividends and 28% on others in one year is not allowed.
- Credit choosers lose rent relief and face AMT inclusion. The 8.5% headline interacts with the whole return, not just the dividend line.
- Thin treaties strand many payouts at 21%. Investors routing through non-treaty jurisdictions should price full withholding.
- The 28% separate lane still requires filing. Skipping the return because tax was withheld triggers penalties.
Frequently asked questions
Does Taiwan tax dividends?
Yes. Residents choose an 8.5% credit up to TWD 80,000 or a flat 28% separate rate each year, while non-residents face 21% withholding.
Which dividend choice is better?
The credit usually wins for modest dividends in low brackets; the 28% flat wins for large payouts facing 30% or 40% margins. Model both yearly.
What withholding applies to dividends leaving Taiwan?
Domestic law withholds 21%, reduced by the few treaties mostly to 10% with documentation.