Taxation in the Republic of China

Taxes provide an important source of revenue for various levels of the Government of the Republic of China. The tax revenue of Taiwan in 2015 amounted NT$2.1 trillion.

The Ministry of Finance, which is part of the Executive Yuan, is the highest government entity responsible for implementing taxation policies and overseeing the leveling and collection of taxes. Taxation occurs at both the national and local government level.

Two broad categories of taxes exist at the national level: customs duties and inland taxes. Customs duties are administered by the Directorate-General of Customs, which has local offices throughout the country. Five national tax administrations who are directly subordinate to the central government handle oversight of all inland taxes. Inland taxes is a broad term that includes:

Individual municipalities, counties, and cities have set up Revenue Service Offices responsible for collecting a range of taxes, including:

Unlike the Internal Revenue Code in the United States, there isn't one law that governs taxation in Taiwan. Rather, taxes are governed by a series of laws and regulations each related to a specific type of tax. As the chief legislative body, the Legislative Yuan plays an important role in formulating and revising tax related laws. The Income Tax Act is the primary law that governs individual income and profit-seeking enterprise income taxes.

Both residents and non-residents are assessed individual income tax on Taiwan-sourced income unless an exception is provided in the Income Tax Act and related laws. Individuals are considered residents of Taiwan for tax purposes if they are either domiciled there, or spend more than 183 days or longer in a taxable year.

Income received in exchange for services rendered while physically present in Taiwan is considered to be Republic of China-sourced income regardless of if the payer is a local or offshore person or entity. One major exception to this rule exists for non-residents who are physically present in Taiwan for less than 90 calendar days in a year and who are only paid compensation by offshore entities.

Taiwan has implemented a progressive tax system for individual income taxes. For the 2011 tax year, the tax rates were as follows:

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