Taiwan: Tax reform proposals - KPMG Global
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Taiwan: Tax reform proposals affecting both corporate and individual taxpayers

Taiwan: Tax reform proposals

The Ministry of Finance has proposed changes to Taiwan’s tax system. The tax reform would adjust the tax rate structure for both individual and corporate income taxpayers; reduce the tax burden for domestic investors on dividend income; reduce the individual income tax rate; raise the corporate income tax rate; reduce the surtax rate; implement a new passthrough regime for the taxation of sole proprietorships and partnerships, among other items. The proposals are expected to be submitted to the legislature in October 2017.


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Under the draft bill, the imputation tax system would be repealed, and the rate of withholding tax on dividends paid to non-resident foreign investors would be increased from 20% to 21%. 

Proposed changes for corporate income tax

The legislation would propose the following changes to the taxation of corporations:

  • An increased rate of corporate income tax, from 17% to 20%
  • Companies no longer required to maintain an imputation credit account, given the proposed repeal of the imputation tax system
  • A decrease in the rate of the surtax, from 10% to 5%
  • Tax transparent treatment of sole proprietorships and partnerships (that is, income to be taxed at the sole proprietor and partner level)
  • Dividends received by domestic corporations as shareholders in other domestic corporates to continue to be exempt from corporate income tax

Proposed changes for individual income tax

The legislation would propose the following changes on the taxation of individuals:

  • Concerning the individual income taxation of dividend income for residents of Taiwan, the imputation tax system would be repealed and replaced; there would be two alternative plans for how to tax dividends paid to individual investors.
  • The highest tax bracket would be reduced from 45% to 40%.
  • There would be increases to the standard deduction amounts.


Read a September 2017 report [PDF 360 KB] prepared by the KPMG member firm in Taiwan

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