Taiwan: Tax developments in response to COVID-19
General Information
This page offers an overview of tax developments being reported globally by KPMG member firms in response to the Novel Coronavirus (COVID-19).
The content will be updated regularly. However, due to the fast-moving pace of change, it may not always reflect the most current developments in a given jurisdiction. Please refer to the date of accuracy and refer to the relevant links, under additional information, for original source information.
Date accurate as of: 30 September 2020
The government of Taiwan announced measures providing a broad range of tax relief in response to the coronavirus (COVID-19) pandemic. Among the tax relief measures are:
Deferral of tax payments or by installments
- On March 25, 2020 Taiwan Ministry of Finance (MOF) announced a special guideline allowing taxpayers having difficulties to make tax payments to apply for deferral of tax payments or by monthly installments.
Applicable period
- The special guideline is applicable to tax payments due date fall between January 15, 2020 to June 30, 2021.
Applicable taxpayers
- Taxpayers having difficulties to make tax payments by the statutory deadline due to COVID-19 may apply for deferral of tax payments for a maximum of 12 months or by monthly installments of up to 36 months, without late payment interest, if meeting any of the following conditions:
For Business entities
- Entitle to supportive measures under the relevant COVID-19 special relief and restoration regulations as announced by the relevant central competent authorities; or
- Having significant decline in business revenue – for instance, monthly turnover dropping by 15% or more for two consecutive periods since January 2020, comparing to the average in past 6 months or 12 months.
For Individuals
- Entitle to supportive measures under the relevant COVID-19 special relief and restoration regulations as announced by the relevant central competent authorities;
- Under no paid or part paid leave scheme implemented by employer affected by COVID-19 situation with prior notification to the local labor affair authorities in-charge; or
- Suffering from other situations due to COVID-19 (e.g. wage cut, lay off or having monthly working days dropped by 50% from original schedule for two or more months).
Applicable taxes
- Individual income tax, individual house and land transactions income tax, corporate income tax, VAT, commodity tax, liquor & tobacco tax, specifically selected goods and services tax, house tax, land value tax, vehicle license tax, and relevant interest and penalty of these taxes.
Waiver of provisional corporate income tax payment for enterprises affected by COVID-19
On 31 July 2020 Taiwan MOF announced a tax ruling which relief affected enterprises for making provisional corporate income tax payments for Year 2020.
Applicable period
The ruling is applicable for provisional corporate income tax payment for Year 2020 which due date fall between January 15, 2020 to June 30, 2021.
Applicable taxpayers
The above ruling is applicable for enterprises meeting any one of the following conditions:
Entitle to supportive measures under the relevant COVID-19 special relief and restoration regulations as announced by the relevant central competent authorities; or
Having significant decline in business revenue – for instance, monthly turnover dropping by 15% or more for two consecutive periods since January 2020, comparing to the average in past 6 months or 12 months.
Other relief measures
Apart from the above, the Taiwan government also released other relief policies covering temporary relief on house tax and vehicle license tax during its idle period in light of the current COVID-19 situation; and pro-rata exemption on VAT and amusement tax for taxpayers levied under special assessment basis during its business suspension period.
Corporate income tax 200% deduction on certain salary expenses
As part of the Special Act on COVID-19 Prevention, Relief and Restoration announced on February 25, 2020 to alleviate the social and economic impact, Taiwan MOF also announced a tax ruling on March 10, 2020 to provide guidance on how companies can deduct additional salaries expenses for employees who are affected by COVID-19.
Applicable period
The Special Act is applicable from January 15, 2020 to June 30, 2021
Applicable expenditures
Salaries, wages, service pay and other regular compensations paid to employees during their
statutory leave period falling under any one of the following reasons:
- Under quarantine or isolation order from the various level of health department and authorities;
- Taking care of dependent family members who is under quarantine and isolation order; or
- Upon receiving special instructions from the epidemic command center of the central government.
