This post delivers a comprehensive overview of corporate tax rules for companies in Taiwan in 2025. All essential details regarding tax rates, brackets, and applicable surtaxes are extracted directly from the latest available data.
Corporate Income Tax Structure in Taiwan (2025)
The corporate tax system in Taiwan uses a progressive structure, with different rates applying based on a company’s taxable earnings. The official reporting currency is the New Taiwan Dollar (TWD).
| Taxable Income Bracket (TWD) | Rate (%) |
|---|---|
| 0 – 120,000 | 0% |
| 120,001 and above | 20% |
Companies in Taiwan are taxed on their profits according to the above brackets. For the first TWD 120,000 of taxable income (approximately $3,770 USD, using 1 USD ≈ 32 TWD), the tax rate is 0%. For taxable profits exceeding TWD 120,001 (about $3,770 USD), a standard rate of 20% applies.
Surtaxes and Additional Taxes
Beyond the main corporate income tax, Taiwan imposes certain surtaxes under specific conditions:
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| Surtax Description | Rate (%) | Condition |
|---|---|---|
| Undistributed Earnings Surtax | 5% | Applied to undistributed current earnings of a corporation by the end of the following year; not applicable to Taiwan branches of foreign companies |
| Income Basic Tax (IBT) | 12% | Imposed if the company earns qualifying tax-exempt income and the IBT calculation exceeds the regular corporate income tax |
The 5% surtax on undistributed earnings encourages companies to distribute profits timely. The 12% Income Basic Tax (IBT) is relevant if a company benefits from certain tax exemptions and, when calculated, results in tax payable above the standard corporate tax.
Assessment and Reporting Basis
In Taiwan, the basis of assessment for corporate tax is strictly at the company (corporate) level, not on shareholders or individual partners. All taxable profits must be declared in New Taiwan Dollars (TWD).
Useful Comparisons and Unavailable Data
While the primary tax rates and thresholds are clearly defined, there is currently no publicly disclosed information regarding minimum or maximum holding periods for assets to impact the standard corporate tax regime in Taiwan. This data may be subject to periodic revision by Taiwanese authorities.
Pro Tips for Navigating Taiwan’s Corporate Tax System
- Monitor undistributed profits closely to avoid unexpected 5% surtax liabilities at year-end. Timely profit distribution can help optimize your effective tax rate.
- Assess your company’s eligibility for any tax exemptions with caution—if qualifying for exemptions, always check the comparative impact of the 12% IBT to prevent compliance surprises.
- File all corporate tax returns and related declarations in New Taiwan Dollars (TWD), and keep updated on any official exchange rates if conducting multi-currency business.
- Double-check whether your entity’s income sources or operations may classify it as a branch of a foreign company, in which case the undistributed earnings surtax may not apply.
Official Tax Authority Information
The most authoritative and updated guidelines, as well as online corporate tax forms and contact information for inquiries, are available directly from Taiwan’s Ministry of Finance: https://www.mof.gov.tw
In summary, Taiwan’s 2025 corporate tax regime is based on a straightforward progressive structure, primarily centered around a 20% rate for most active companies. Surtaxes are relevant for profit retention and certain tax-exempt income situations, making timely planning and compliance especially important. Knowing the assessment basis and understanding the thresholds can help companies manage their tax position with confidence.