Global

Details

  • 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)




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