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Taiwan MOF Explains Tax Treatment of Taiwan-Based Income Paid to Foreign Companies

Oct. 22, 2021, 5:00 AM

The Taiwanese Ministry of Finance Oct. 19 explained the tax treatment of Taiwan-based income earned by foreign companies. A foreign company signed a consulting agreement with a related domestic company for the foreign company to provide consulting services for accounting systems and warehouse management. Taxes on the agreement were paid as a percentage of the domestic company’s monthly net sales. Under Article 25, Item 1 of the Income Tax Act, foreign-based companies providing technical services or equipment rentals within Taiwan may apply to treat 15 percent of their domestic-sourced income as deemed taxable income. The tax bureau clarified that: 1) ...

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