Reduced Withholding Tax

Introduction

When a foreign company or individual receives “Taiwan-sourced income” from a Taiwanese company, there is withholding tax on such income. The withholding rate varies by the type of income and ranges from 15% to 21%. On the other hand, there are certain tax strategies to mitigate the tax liabilities, and this article purposes to outline the three most frequently considered solutions and consists of five parts:

  • I. International withholding tax
  • II. Income Tax Act 25 (“ITA 25”)
  • III. Tax treaties
  • IV. Tax exemption for royalties
  • V. More considerations
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