• Service: Tax, Global Indirect Tax, Global Mobility Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 3/20/2014

Taiwan - Increased business tax rate for financial services 

March 20:  Taiwan’s Executive Yuan on 13 March 2014 passed draft amendments to the income tax law, value added tax (VAT) law, and business tax law, and with this action, the legislation is sent to the Legislative Yuan for its consideration.

The legislative measures are generally similar to the short-term tax regime proposal as previously announced by the Ministry of Finance.

The effective date for the income tax law amendments would be 1 January 2015.

Among the proposals:

  • The business tax rate on “core business” revenues of banking and insurance sectors would be increased to 5% (up from 2%).
  • For foreign financial institutions having no fixed place of business in Taiwan but selling certain services—the purchasers of these services would be required to compute and pay the amount of business tax on such services.
  • The imputation tax credit ratio on dividends would be halved.
  • A non-small-scale profit-seeking enterprise organized as a sole proprietorship or partnership would be required to pay half the amount of tax payable after deducting unused withholding taxes, as reported on its income tax returns.
  • The highest marginal rate for individual income taxpayers would be increased to 45%.
  • Special tax deductions for income derived from salaries and for disabled and/or handicapped persons would be adjusted based on consumer price indices.

Read a March 2014 report [PDF 101 KB] prepared by the KPMG member firm in Taiwan: e-Tax Alert (March 2014)

©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International.

KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.

The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Direct comments, including requests for subscriptions, to
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.


Share this

Share this


Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)

Already a Subscriber? Login

Not a member? Subscribe now