This Taiwan tax guide covers the rules in force from 1 January 2026. Residents pay five progressive bands from 5% to 40%, companies a flat 20%, and VAT is just 5%. There is no wealth tax and no income tax on listed-share gains. Foreign-source income sits outside the ordinary income tax altogether and is reached only by a 20% alternative minimum tax above NT$7,500,000 (~$234,000). Both the inflation-indexed brackets and a rewritten foreign-talent law took effect on 1 January 2026.
Introduction
Taiwan is an island of roughly 23.4 million people lying about 180 km off the south-east coast of mainland China, straddling the Tropic of Cancer, with a typhoon season from July to September. It is a multiparty democracy with a directly elected president and a civil-law system inherited from the German and Japanese traditions — though the presidency and the legislative majority have been held by opposing parties since the 2024 elections, which slows tax legislation. Mandarin Chinese is official and English is common in professional services and technology. Taiwan is a WTO and APEC member and a CPTPP applicant, but not a UN, OECD or EU member, and holds formal diplomatic relations with only a handful of states. Living costs are modest for a high-income economy: Taipei housing, healthcare and food are materially cheaper than Singapore, Hong Kong or Tokyo, and National Health Insurance is near-universal.
This Taiwan tax guide matters because the headline arithmetic is unusually favourable for internationally mobile earners. Individual residents are taxed on Taiwan-source income only; foreign-source income never enters the ordinary return and is captured solely by the Income Basic Tax, a 20% alternative minimum tax that bites only where basic income exceeds NT$7,500,000 (~$234,000). Gains on listed shares are exempt from income tax. Corporate tax is 20%, VAT is 5%, and there is no wealth tax and no annual net-worth reporting. Two changes landed on 1 January 2026: the Ministry of Finance lifted the brackets, personal exemption and standard deduction for inflation, and a substantially amended Act for the Recruitment and Employment of Foreign Professionals took effect, easing Employment Gold Card qualification, cutting the permanent-residence clock for foreign special professionals from five years to three, and granting their spouses independent work rights.
Direct Taxes
Individual residence turns on physical presence: 183 days or more in a calendar year makes you a resident, taxed at progressive rates on Taiwan-source income; below that you are a non-resident taxed by flat withholding. Companies are resident if their head office is registered in Taiwan, in which case they are taxed on worldwide profits at a flat rate. The signature concept for investors is the Income Basic Tax — Taiwan’s alternative minimum tax — because it is the only mechanism that touches an individual resident’s offshore income, and it does so at a single 20% rate above a generous exemption.
Personal income tax (2026 bands)
| Chargeable income (NT$, USD) | Rate |
|---|---|
| 0 – 610,000 (up to ~$19,000) | 5% |
| 610,001 – 1,380,000 (~$19,000 – ~$43,100) | 12% |
| 1,380,001 – 2,770,000 (~$43,100 – ~$86,400) | 20% |
| 2,770,001 – 5,190,000 (~$86,400 – ~$162,000) | 30% |
| Over 5,190,000 (over ~$162,000) | 40% |
These bands apply to 2026 income, filed in May 2027, and replace the 2024–2025 bands, which topped out above NT$4,980,000 (~$155,400). Alongside them the personal exemption rose to NT$101,000 (~$3,150) per person — NT$151,500 (~$4,730) for lineal ascendants aged 70 or over — the standard deduction to NT$136,000 (~$4,240) single and NT$272,000 (~$8,490) married, and the salary special deduction to NT$227,000 (~$7,080). A single employed resident therefore shelters NT$464,000 (~$14,500) before the 5% band even starts. A savings and investment deduction of up to NT$270,000 (~$8,430) per household covers most bank interest. Non-residents are outside this table entirely: Taiwan-source salary is withheld at a flat 18%, dropping to 6% where monthly pay does not exceed 1.5× the minimum wage, i.e. NT$44,250 (~$1,380) in 2026.
Corporate income tax
| Item | Rate |
|---|---|
| Standard profit-seeking enterprise income tax | 20% |
| Taxable income of NT$120,000 (~$3,750) or less | 0% |
| Surtax on earnings left undistributed after the following year | 5% |
| Income Basic Tax (corporate AMT) — standard | 12% |
| Income Basic Tax — in-scope large multinational groups (from 1 Jan 2025) | 15% |
The corporate AMT applies to a basic income figure after a NT$600,000 (~$18,700) exemption, and mainly recaptures otherwise-exempt securities gains and certain incentivised income. From 1 January 2025 the Executive Yuan raised that rate to 15% for Taiwanese entities of multinational groups meeting the OECD Pillar Two revenue test of €750 million (~$865 million) — a deliberate move to lift effective rates toward 15% and reduce foreign top-up tax, although Taiwan has not enacted GloBE rules or a qualified domestic minimum top-up tax, so the AMT is not a QDMTT. Dividends received by one Taiwanese company from another are excluded from taxable income, making a domestic holding structure clean. Losses carry forward ten years. R&D spending earns a credit of 15% of qualifying expenditure in the current year, capped at 30% of tax payable, or 10% spread over three years, and Article 10-2 of the Statute for Industrial Innovation offers a 25% forward-looking innovation credit to firms clearing NT$6 billion (~$187 million) of R&D, 6% R&D intensity and a 15% effective tax rate.
Social security and health contributions
| Contribution | Total rate | Employee share | Employer share |
|---|---|---|---|
| Labour insurance (ordinary risk) | 11.5% | 20% | 70% (state 10%) |
| Employment insurance | 1% | 20% | 70% (state 10%) |
| Occupational accident insurance | 0.12%–0.96% | 0% | 100% |
| Labour pension (individual account) | 6% minimum | voluntary, up to 6% | 6% minimum |
| National health insurance | 5.17% | 30% | 60% (state 10%) |
| NHI supplementary premium | 2.11% | withheld on specified income | — |
Contributions run off capped grade tables rather than full salary, which is what makes Taiwan cheap for high earners: labour and occupational accident insurance are calculated on an insured salary capped at NT$45,800 (~$1,430) a month, and labour pension on a contribution wage capped at NT$150,000 (~$4,680) a month. The NHI premium rate was held at 5.17% for 2026, and the 2.11% supplementary premium is withheld separately on bonuses exceeding four months’ insured salary, dividends, rent, interest, professional fees and second-job income. The monthly minimum wage rose to NT$29,500 (~$920) on 1 January 2026. In absolute terms a senior executive’s total social burden is a small fraction of the European equivalent.
Indirect Taxes
Business tax is Taiwan’s main indirect tax and runs on two parallel systems: a conventional credit-invoice VAT for most businesses, and a gross business receipts tax for financial institutions, small traders and certain entertainment venues. VAT returns are filed bi-monthly.
Value-added tax (VAT)
| Rate | Applies to (examples) |
|---|---|
| 5% (standard) | Most goods and services |
| 0% (zero) | Exports, exported services, international transport, goods sold to bonded zones |
| Exempt | Sale of land, medical and educational services, certain financial and insurance supplies |
| 1% (special regime) | Small businesses below the audited threshold |
| 2%–5% (special regime) | Banks, insurers and other financial institutions on core and non-core revenue |
| 15%–25% (special regime) | Nightclubs and food-and-beverage venues with entertainment services |
Non-resident suppliers of cross-border electronic services to Taiwanese consumers must register and charge the 5% business tax once annual Taiwan sales exceed NT$480,000 (~$15,000).
Excise and other indirect taxes
| Tax | Notes |
|---|---|
| Commodity tax | Levied on rubber tyres, cement, beverages, flat glass, oil and gas, electrical appliances and vehicles |
| Tobacco and alcohol tax | Specific duties per unit, plus a tobacco health and welfare surcharge |
| Specifically selected goods and services tax (“luxury tax”) | 10% on yachts, private aircraft, helicopters, cars priced at NT$3,000,000 (~$93,600) or more, ivory and coral; no longer applies to real property |
| Securities transaction tax | 0.3% of proceeds on shares, borne by the seller; halved to 0.15% for same-day round trips |
| Futures transaction tax | 0.0000125%–0.06% of contract value on index futures; 0.1%–0.6% of premium on options |
| Deed tax | 6% of assessed value on the transfer of buildings |
| Stamp tax | 0.4% on monetary receipts; 0.1% on contracting agreements and deeds transferring title |
Other Taxes Worth Knowing
| Tax | Taiwan treatment |
|---|---|
| Capital gains — listed and OTC shares | Exempt from income tax; the 0.3% securities transaction tax applies instead |
| Capital gains — unlisted shares | Exempt from ordinary income tax but included in the individual AMT base |
| Capital gains — real property | House and Land Transaction Income Tax 2.0: 45% (held ≤2 years), 35% (2–5), 20% (5–10), 15% (>10); non-residents only 45% / 35% |
| Dividends (resident individual) | Aggregate with an 8.5% credit capped at NT$80,000 (~$2,500) per household, or a flat 28% separate charge |
| Dividends (resident company) | Exempt — excluded from the recipient company’s taxable income |
| Dividends (non-resident) | 21% withholding, reduced by treaty |
| Interest (resident individual) | Progressive, but the first NT$270,000 (~$8,430) per household is absorbed by the savings deduction |
| Interest and royalties (non-resident) | 15% or 20% on interest; 20% on royalties, reduced by treaty |
| Rental income | Progressive, after a 43% deemed-expense deduction |
| Wealth / net worth tax | None |
| Inheritance / estate tax | 10% / 15% / 20%; exemption NT$13,330,000 (~$416,000) |
| Gift tax | 10% / 15% / 20%; NT$2,440,000 (~$76,100) exempt per donor per year |
| Immovable property tax (annual) | House tax 1% owner-occupied, 2%–4.8% non-owner-occupied; land value tax 0.2% self-use, 1%–5.5% otherwise |
| Foreign-source income (resident individual) | Outside the ordinary income tax; caught only by the 20% AMT |
The capital gains base is deliberately narrow. A resident trading Taiwan-listed equities pays no income tax at all — just 0.3% of gross proceeds on the sell side — and the same exemption covers most funds and ETFs. Estate tax steps up to 15% above a net estate of NT$56,210,000 (~$1.75 million) and 20% above NT$112,420,000 (~$3.51 million), with a spouse deduction of NT$5,530,000 (~$172,600) on top of the exemption; gift tax mirrors those brackets from NT$28,110,000 (~$877,000). Property is the exception to the light touch: a Taiwan resident selling a household-registered primary home held over six years exempts the first NT$4,000,000 (~$125,000) of gain and pays 10% on the balance, but a flipper pays 45%, and land value increment tax of 20%–40% applies to the land element on top. House Tax 2.0, first levied in May 2025, aggregates non-owner-occupied homes nationally and prices multiple holdings progressively.
Disadvantages & Risks
The dominant risk is not fiscal. Taiwan sits in the most closely watched geopolitical flashpoint in Asia, and the possibility of blockade, coercion or conflict with the People’s Republic of China is priced into insurance, shipping and capital allocation in a way it is not for Singapore or Dubai. The economy is also unusually concentrated: semiconductors and related electronics dominate exports and tax receipts, so a single-sector downturn transmits quickly to the currency and the budget, and energy is roughly 97% imported. The New Taiwan dollar is not internationalised and remains subject to foreign-exchange settlement quotas — broadly US$5 million a year for individuals and US$50 million for companies without central bank approval — so large, fast cross-border movements need planning. Filings and most tax correspondence are in Chinese, and English-language guidance lags the substantive rules.
On the tax side, Taiwan is respectable rather than exposed: it is not on Annex I or Annex II of the EU’s list of non-cooperative jurisdictions as at the February 2026 update, is an Asia/Pacific Group on Money Laundering member in regular follow-up, and is not FATF grey-listed. But the treaty network is thin — 35 comprehensive double tax agreements, and crucially no treaty with the United States, which leaves 30% US withholding in place; the US–Taiwan Expedited Double-Tax Relief Act passed the House of Representatives 423–1 on 15 January 2025 but was still awaiting Senate action as of mid-2026. Anti-avoidance has tightened materially: CFC rules have applied since 2023 to both companies and individuals, pulling undistributed low-taxed offshore profits into the Taiwanese base, and the dormant place of effective management provision in Article 43-4 of the Income Tax Act can be switched on by the Executive Yuan at any time, which would treat foreign-incorporated but Taiwan-managed companies as domestic taxpayers. Add a divided legislature that makes the direction of the next reform hard to forecast, and rising property taxes, and the picture is of a moderate, well-administered system rather than an offshore haven.
Strategy & Ideal Profile
The structure that works best is simple. Individuals earning from outside Taiwan should establish residence, keep the income foreign-sourced, and manage exposure to the single 20% Income Basic Tax: foreign income only enters the calculation once it reaches NT$1,000,000 (~$31,200), and tax only arises where total basic income exceeds NT$7,500,000 (~$234,000). Below that line, a resident with offshore investment income pays nothing in Taiwan. Layered on top is the Employment Gold Card, a four-in-one work permit, resident visa, ARC and re-entry permit. Under Article 20 of the Act for the Recruitment and Employment of Foreign Professionals, a qualifying foreign special professional who resides 183 days or more and earns Taiwan salary above NT$3,000,000 (~$93,600) excludes half the excess from taxable income for five years — and, for the same five years, excludes overseas income from the AMT base entirely. Operating businesses generally use a Taiwan company at 20%, distributing annually to avoid the 5% undistributed earnings surtax, with inter-company dividends flowing up untaxed.
It suits several profiles. Company owners in software, hardware design or anything touching the electronics supply chain get 20% corporate tax, R&D credits and the world’s densest semiconductor ecosystem. Investors and traders in listed equities pay no income tax on gains and 0.3% on disposals — arguably the single most attractive feature in the region. Dividend earners can cap their marginal rate at 28% by electing separate taxation, beating the 40% top band. Gold Card professionals get a five-year window in which foreign income is invisible to the AMT and half of high Taiwanese salary is exempt, with permanent residence now reachable in three years. Retirees face no wealth tax, no tax on foreign pensions below the AMT thresholds, and low-cost healthcare. The residence test is the cleanest in Asia: count to 183 days.
It does not suit everyone. High earners paid in Taiwan hit a 40% top rate starting at only NT$5,190,000 (~$162,000), and no non-dom regime shelters domestic income. Property speculators are actively targeted, and non-residents can never access the NT$4,000,000 (~$125,000) primary-residence exemption because it requires household registration. US persons get no treaty relief and remain fully exposed to US worldwide taxation. And the headline benefit sunsets: the Gold Card exemption ends after five years, after which offshore income comes inside the AMT net.
FAQ
Is Taiwan a tax haven?
No. Taiwan has a 20% corporate rate, a 40% top personal rate, CFC rules in force since 2023, transfer pricing documentation requirements and full information exchange with partner jurisdictions. It is not on the EU’s non-cooperative lists or any FATF list. What it offers is a narrow tax base — no wealth tax, no income tax on listed-share gains, and foreign-source income reached only by a 20% alternative minimum tax — rather than low rates.
What is the corporate tax rate in Taiwan in 2026?
A flat 20% on profit-seeking enterprise income, with taxable income of NT$120,000 (~$3,750) or less exempt. Earnings still undistributed at the end of the following year attract an additional 5% surtax. An Income Basic Tax of 12% applies as a floor, raised to 15% from 1 January 2025 for Taiwanese entities of multinational groups with consolidated revenue of €750 million (~$865 million) or more.
How does the Employment Gold Card tax break work?
For five consecutive tax years, a qualifying foreign special professional who spends 183 days or more in Taiwan and earns Taiwan-source salary above NT$3,000,000 (~$93,600) excludes half of the amount above that threshold from taxable income, and excludes overseas income from the Income Basic Tax base. On a NT$8,000,000 (~$250,000) salary, that removes NT$2,500,000 (~$78,000) from the top of the return.
What is the 183-day rule?
Spend 183 days or more in Taiwan in a calendar year and you are a resident, taxed at 5%–40% on Taiwan-source income and filing an annual return by 31 May. Between 90 and 183 days you are a non-resident taxed by 18% withholding on Taiwan-source income. Under 90 days, remuneration paid by an offshore employer for services performed in Taiwan is generally exempt.
Does Taiwan tax capital gains?
Only selectively. Gains on Taiwan-listed and OTC shares are exempt from income tax; sellers pay 0.3% securities transaction tax on gross proceeds instead. Gains on unlisted shares are exempt from the ordinary income tax but enter the individual AMT base. Real property is fully taxed under House and Land Transaction Income Tax 2.0 at 45%, 35%, 20% or 15% depending on holding period.
Is there inheritance or wealth tax in Taiwan?
There is no wealth or net worth tax. Estate tax does exist, at 10%, 15% and 20%, with a NT$13,330,000 (~$416,000) exemption per decedent, a NT$5,530,000 (~$172,600) spouse deduction and a NT$1,380,000 (~$43,100) funeral deduction. Gift tax uses the same rate ladder with a NT$2,440,000 (~$76,100) annual exemption per donor. Residents are assessed on worldwide assets; non-residents only on Taiwan-situs property, with most deductions unavailable.
How are dividends taxed for a foreign investor?
Dividends paid to a non-resident individual or company are subject to 21% withholding, which is a final tax with no further filing obligation, reduced where one of Taiwan’s 35 double tax agreements applies. There is no US–Taiwan treaty, so US investors face the full 21%. A resident individual instead chooses between including dividends in the return with an 8.5% credit capped at NT$80,000 (~$2,500) per household, or a flat 28% separate charge.
Sources
- Taxation Administration, Ministry of Finance — income tax, estate and gift tax, business tax and house and land transaction income tax — dot.gov.tw
- eTax Portal, Ministry of Finance — 2026 progressive rate table and table of exemptions and deductions — etax.nat.gov.tw
- Ministry of Finance, R.O.C. — Income Basic Tax thresholds for 2026, CFC rules and foreign special professional decrees — mof.gov.tw
- National Taxation Bureau of Taipei — Income Basic Tax, withholding rates, estate and gift tax guidance — ntbt.gov.tw
- Laws & Regulations Database of the Republic of China — Income Tax Act, Income Basic Tax Act, Estate and Gift Tax Act, Securities Transaction Tax Act — law.moj.gov.tw
- Bureau of Labor Insurance, Ministry of Labor — labour insurance, employment insurance and labour pension rates and sharing ratios — bli.gov.tw
- National Health Insurance Administration, Ministry of Health and Welfare — 2026 premium rate and supplementary premium — nhi.gov.tw
- National Development Council and Taiwan Employment Gold Card Office — Act for the Recruitment and Employment of Foreign Professionals and its 2026 amendments — goldcard.nat.gov.tw
- Central Bank of the Republic of China (Taiwan) — NT$/US$ closing rate used for the USD conversions — cbc.gov.tw
USD figures are indicative conversions at ~1 USD = NT$32.05 (Central Bank of the Republic of China (Taiwan) closing rate, 14 August 2026) and rounded. The €750 million Pillar Two threshold is converted at ~1 EUR = 1.153 USD (ECB reference rate, August 2026).
Last verified: 15 August 2026.
This is general information, not personal tax or legal advice. Tax outcomes depend on your specific facts; consult a qualified Taiwan tax adviser before acting.
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