After setting up your company in Taiwan, tax obligations become a crucial part of running a successful business. Two main taxes you'll encounter are:
VAT (Value-Added Tax) - the VAT rate is 5% on every sale.
Filed every two months (filing deadline 15th of each odd month), VAT allows you to deduct tax liabilities by collecting "fapiaos" (invoices) for work-related expenses like gas and stationery. Remember, fapiaos from domestic companies are key for deductions.
Business Income Tax (Taiwan Profit-seeking Enterprise Income Tax)
Filed annually (filing deadline 5/31 of each year), business tax declarations can be done through two main methods:
A) Paper Review: Ideal for smaller companies (less than NTD 30 million annual revenue) with limited accounting staff. This involves manually reviewing and submitting tax forms.
B) Accounting Book Audit: Suitable for companies with comprehensive accounting records and annual revenue exceeding NTD 30 million. This method involves a thorough audit of your accounting books by tax authorities.
C) Assessed and Certified by CPA: for companies annaul revenue that generate more than NTD 100 million, they could appoint a CPA to verify their financial statements.
Remember:
Collect work-related fapiaos: Make good use of your VAT deductions by collecting fapiaos for all eligible business expenses.
Choose the right declaration method: Evaluate your company size, revenue, and accounting resources to choose the most efficient method for business tax declaration.
By making informed tax decisions, you can optimize your financial journey and focus on growing your business in Taiwan.
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