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Issuance of explanatory decree regarding “the application of Beneficial Owner” under tax treaties


June 24, 2019

In order to enhance the certainty with respect to applying for tax reduction under tax treaties (i.e., Agreements for the Avoidance of Double Taxation with Respect to Taxes on Income), the Ministry of Finance released the explanatory decree no. 10800577770 on June 24, 2019 to clarify the application of the term “beneficial owner” under tax treaties.  The content of the decree is made with reference to the relevant Commentaries of the OECD Model Tax Convention, the positions adopted by other countries, and its current practice.  The decree, therefore, may ease the obligation of taxpayers when applying the term.  The decree also specifies the situations where a taxpayer will be denied beneficial owner status.


為提升適用所得稅協定減免稅之安定性,財政部參考經濟合作暨發展組織(OECD)稅約範本註釋、他國作法及我國實務,於108年6月24日發布台財際字第10800577770號令,核釋所得稅協定受益所有人(beneficial owner)之適用,一方面簡化納稅者協力義務,一方面明定非屬受益所有人之情形,以供徵納雙方遵循。

On-going tax reform projects by Ministry of Finance


June 04, 2019

The Ministry of Finance provides updates on tax benefits starting from 2019, such as commodity tax reduction regarding certain appliances and vehicles, tax benefits provided under “Urban Renewal Act”, dedicated tax services by national taxation bureaus in accordance with the action plan for welcoming overseas Taiwanese businesses to return to invest in Taiwan. In addition, new tax reform projects under discussion include: proposed salary and long-term care deduction under individual income tax rules, management and taxation on overseas funds repatriated, revised tax benefits provided under “Statue for Industrial Innovation”, amendment to “Tax Collection Act”, and increased tax exemption for prizes won in a lottery held under government auspices. 


Ministry of Finance clarified whether overseas funds repatriated by individual residents will be taxed?


February 12, 2019

The Ministry of Finance has issued a tax ruling to clarify what types of overseas funds repatriated by individual residents will not be subject to income tax. A reference list for the documents to be prepared for explanation and a flowchart for judgment are also attached. This clarification is intended to eliminate misunderstandings and encourage individual residents to repatriate overseas funds and invest in Taiwan. 


Taiwan and Japan will conduct automatic exchange of Financial Account Information (CRS) in Tax Matters and of CbCR


December 03, 2018

The Ministry of Finance stated that Taiwan and Japan reached a consensus on conducting automatic exchange of Financial Account Information (CRS) in Tax Matters and of Country-by-Country Reports (CbCR). Therefore, the Ministry of Finance will provide Japan with, as well as receive from Japan, the Financial Account Information (CRS) commencing on or after 2019 and the CbCR of the Ultimate Parent Entity (UPE) of Multinational Enterprise (MNE) Groups of which fiscal year commences on or after January 1, 2017. 



Deadline for submitting CbCR and MF


November 05, 2018

The 3-tiered transfer pricing documentation regime is applicable to fiscal years beginning on or after January 1, 2017
(FY2017).  The deadline for submitting CbCR and MF of FY2017 is by the end of one year after FY2017. Companies who adopt calendar years as accounting years should submit CbCR and MF by December 31, 2018 for tax returns of FY2017. However, if the foreign ultimate parent’s accounting year is inconsistent with that of the group member in Taiwan, the Taiwan member may apply for postponing the deadline for submission according to the ultimate parent’s accounting year. For example, if the ultimate parent’s FY2017 for preparing CbCR is “4/1/2017 to 3/31/2018” and the Taiwan member adopts “1/1/2017 to 12/31/2017” for FY2017, the Taiwan member can apply to tax authorities by December 31, 2018 for approval of submitting CbCR by March 31, 2019.



Foreign electronic service providers’ tax reporting status


August 28, 2018

Taiwan Ministry of Finance recently clarified the tax reporting status of foreign e-service providers as follows: 1) VAT (As from May 1, 2017, a foreign entity, without a fixed place of business or a business agent in Taiwan, providing cross-border e-services to domestic individuals should register and pay VAT.): 85 foreign entities reported and paid VAT in total of NT$3.54 billion (period: May 2017 to Jun 2018).  The said foreign entities should issue cloud invoices starting from Jan 1, 2019; however, the period from Jan 1 to Dec 31, 2019 is deemed the preparation period in which no penalty will be enforced. 2) Corporate Income Tax (The said foreign entities should have filed income tax return in May 2018 for FY2017’s income from domestic individuals.): 60 foreign entities reported and paid income tax in total of NT$0.68 billion for FY2017. Foreign entities that failed to file the return in time should file it by Sep 30, 2018. 3) Withholding Tax ...



1) 營業稅(自106年5月1日起,在我國境內無固定營業場所及營業代理人之境外電商對我國境內自然人銷售電子勞務,應辦理稅籍登記,並按期申報繳納營業稅):85家境外電商申報,共計繳稅35.4億元(106年5月至107年6月)。另將積極輔導境外電商自108年1月起開立雲端發票,惟108年1月1日至12月31日止為輔導期故免罰。2) 營所稅(前述境外電商對我國境內自然人銷售電子勞務,非屬扣繳範圍,應於107年5月辦理106年度營所稅申報及繳納稅款):60家境外電商申報,共計繳稅6.8億元(106年度)。提醒未申報之境外電商儘速於107年9月30日前自動補報補繳。3) 扣繳...

MOF clarified the progress of proceeding tax information exchange


August 21, 2018

Taiwan Ministry of Finance (MOF) recently clarified the progress of proceeding tax information exchange in compliance with global standards.  The progress includes: 1) Exchange of Information on Request (EOIR) under conditions for the exchange of information requested by a foreign jurisdiction; 2) Spontaneous Exchange of Information (SEOI) under the base erosion and profit shifting (BEPS) project Action 5 on the prevention of harmful tax practices; 3) Automatic Exchange of Information (AEOI), such as the automatic exchange of country-by-country reports (CbCR), with the first exchange scheduled for June 2019 and the AEOI on financial accounts under the common reporting standard (CRS), with the first exchange scheduled for September 2020.


我國近年訂定或修改相關規定為求完備資訊交換法制架構,財政部說明目前執行情形包括:1) 個案資訊交換(Exchange of Information on Request, EOIR),指依據租稅協定,締約一方主管機關要求締約他方主管機關協助提供特定資訊。2) 自發資訊交換(Spontaneous Exchange of Information, SEOI),指締約一方主管機關未經請求,主動提供相關資訊予締約他方主管機關,以達成OECD BEPS行動計畫5「有效打擊有害租稅慣例」之意旨。(3)自動資訊交換(Automatic Exchange of Information, AEOI),指締約一方(通常為所得來源國)主管機關有系統且定期提供締約他方居住者之各項所得資訊予締約他方主管機關。如「國別報告(Country-by-Country Report)」預計於108年6月與締約他方進行首次自動交換;而依共同申報及盡職審查準則(CRS)之金融帳戶資訊,預計於109年9月與締約他方進行首次自動交換。

Promulgation of mutual agreement procedure (MAP) rules under tax treaty


June 27, 2018

Taiwan currently has 32 effective tax treaties which all include the article of MAP.  In order to establish standard MAP procedures in compliance with international guidance and resolve tax treaty disputes, Ministry of Finance announced "Directions Governing Application of Mutual Agreement Procedures of Agreements for the Avoidance of Double Taxation with Respect to Taxes on Income" taking into force from June 25, 2018.  Such new rules specify the conditions to be clarified (e.g., the status determination for the resident of both territories, the issues regarding permanent establishments and attributable business profits, transfer pricing corresponding adjustments, cross-border bilateral or multilateral advance pricing arrangements, etc.), application requirements, work procedures, etc. for taxpayers to follow.



Ministry of Finance provided updates on tax reform projects


June 14, 2018

About tax reform projects, Ministry of Finance recently announced two new rules and emphasized several ongoing items. (A) New rules: 1. For the protection of economically disadvantaged children and teenagers, the related tax exemption is granted for the accounts used for future education and development. 2. For retaining good talents, Statute of Industrial Innovation provides tax incentives regarding employee compensation stocks. (B) Ongoing items: 1. Set up the “Taxpayer Right Protection” webpage to provide one-stop services. 2. Amend individual income tax, corporate income tax and withholding tax on foreign shareholders’ dividends related rules to improve income tax system. 3. Offer certain income tax exemption for qualified foreign professionals working in Taiwan. 4. Offer commodity tax and vehicle license tax related incentives to encourage carbon reduction. 5. Increase tobacco and alcohol tax, estate and gift tax as a financial source of long-term care systems. 6. Offer tax incentives regarding housing policies. 7. Create tax incentives to encourage mobile payment. 8. Clarify points on tax-deductible goodwill. 9. Lower the security transaction tax rate on day trading of stock shares.

財政部宣布二項稅制新措施及未來持續推動之重要稅制措施如後:一、稅制新措施:1.配合「兒童及少年未來教育與發展帳戶條例」之制定,為照顧經濟弱勢兒童與少年,提供該等帳戶相關之免稅優惠。2. 協助公司留攬優秀人才,於「產業創新條例」增訂員工獎酬股票相關之租稅優惠。二、持續推動之重要稅制措施:1.建置「納稅者權利保護專區」網頁,提供一站式服務。2.修改綜所稅、營所稅及外國股東股利課徵等相關稅制優化方案。3.提供外籍專業人士所得稅優惠以協助留攬人才。4.提供貨物稅及使用牌照稅優惠以維護環境、改善空污。5. 調增菸酒稅、遺產及贈與稅以挹注長照制度財源。6.配合住宅政策提供租稅優惠。7.推動行動支付規劃相關租稅措施。8.提升商譽認列之明確性。9.調降當沖稅負,提升臺股量能。

Common mistakes in previous years and changes for FY2017 regarding income tax return preparation


May 10, 2018

The filing period of income tax return for FY2017 started on May 1, 2018.  National Taxation Bureaus in different areas have published newsletters to remind taxpayers of not only the filing deadline (May 31, 2017) but also the common mistakes in previous years and changes for FY2017 regarding income tax return preparation for both individuals and enterprises.


Ministry of Finance announced the list of treaty partners who have not agreed on the exchange of tax information regarding country-by-country report (CbCR)


May 01, 2018

3-tiered TP documentation has come into effect in Taiwan. The preparation rule of CbCR will be applied to corporate income tax return filing cases for the fiscal year beginning on or after January 1, 2017.  Ministry of Finance (MOF) announced the list of treaty partners who have not agreed on the exchange of tax information regarding CbCR on April 27, 2018. They are “Australia, Austria, Belgium, Canada, Denmark, France, Gambia, Germany, Hungary, India, Indonesia, Israel, Italy, Japan, Kiribati, Luxembourg, Macedonia, Malaysia, Netherlands, Paraguay, Poland, Senegal, Singapore, Slovakia, South Africa, Swaziland, Sweden, Switzerland, Thailand, United Kingdom and Vietnam”.  In other words, among 32 treaty partners, only New Zealand agreed on such information exchange.  MOF will continue to update the list according to the negotiation status with treaty partners.  Group members in Taiwan of tax residents in the listed countries should pay attention to the list update to confirm whether CbCR should be submitted according to the regulations.


Re-define “onshore contribution rate” for foreign entities who import and store goods, further manufacture, sell and then deliver to customers onshore and offshore


April 19, 2018

In order to simplify the Taiwan source income calculation for a foreign entity who sets up a fixed place of business, such as a distribution center, or engage a business agent to conduct following 4 types of operations in Taiwan, the Ministry of Finance has re-defined the “onshore contribution rate” for companies to follow......



Common mistakes and things to be aware of when preparing TP documentation


April 12, 2018

In order to assist profit-seeking enterprises with preparing TP documentation, National Taxation Bureau of Taipei has summarized common mistakes and things to be aware of based on the TP audit practices. They are: 1. Controlled transaction analysis should be evaluated on a transaction-by-transaction basis; 2. Financial data should be split properly; 3. All controlled transactions should be analyzed; 4. Business restructuring should be evaluated; 5. The rule of “Substance over form” should be adopted; 6. Adequate methods and indicators should be selected; 7. Filing and submitting documents should be according to the timeline; 8. Multinational group members should file and submit documents in accordance with rules.

財政部臺北國稅局為協助各營利事業於結算申報時,依據相關規定就受控交易辦理申報並備妥移轉訂價文據,已彙整查核移轉訂價案件時常見製作移轉訂價報告之錯誤態樣及應注意事項等以供營利事業遵循,包括:1. 受控交易應以個別交易為基礎進行分析;2. 應妥適拆分財務資料進行分析;3. 應就所有受控交易進行分析;4. 涉及企業重組者應予分析;5. 應以經濟實質作為分析依據;6. 應擇定適合之分析方法及指標;7. 應依規定時限申報及提示資料;8. 跨國企業集團成員應按規定申報及提交資料。 

Foreign electronic service providers can apply for the reduced withholding tax


March 20, 2018

From 2017, income derived by foreign entities from providing cross-border e-services to buyers in Taiwan should be deemed Taiwan-source income and subject to income tax.  If the Taiwan buyers are not responsible for withholding tax on payments to a nonresident e-service provider, the foreign e-service provider will have to report its Taiwan-source income and file a tax return either itself or through a tax agent.  If the Taiwan buyers are responsible for withholding tax on payments to a nonresident e-service provider, they must withhold tax at the normal 20% rate on the gross amount.  However, if a foreign e-service provider obtains the approval from the tax authority to adopt the prescribed profit rate (i.e., 30%) and contribution rate (i.e., 50%) according to the MOF ruling, the effective withholding tax rate can be reduced to 3% (= 30% x 50% x 20%)....


自2017年度起,境外電商銷售電子勞務予我國境內買受人所取得之報酬,視為我國來源所得應課徵所得稅,其課徵方式會因買受人是否為扣繳義務人而有不同,若買受人非屬扣繳義務人,則應自行申報納稅;若屬扣繳義務人,則應由買受人於給付時,按「給付額」扣繳20%,但若境外電商向稽徵機關申請並經核定按財政部頒定淨利率及境內利潤貢獻程度計算所得額,則可將有效扣繳稅率降低至3%(=頒定淨利率30% x頒定境內利潤貢獻程度50% x 扣繳率20%)。...

Ministry of Finance summarized the latest development of tax reform projects


February 28, 2018

From 2017 up to now, MOF has worked on the reform of tax systems and summarized important developments as follows: 1.Extend the execution period for certain tax-deficit cases; 2.Lower the security transaction tax rate on day trading of stock shares; 3.Complete anti-avoidance mechanism; 4.Increase tobacco and alcohol tax, estate and gift tax as a source of funds for long-term care; 5.Amend Tax Collection Act to empower MOF to sign treaties or information exchange agreements for tax purposes with foreign governments based on the principle of reciprocity; 6.Delete the regulations regarding interest imposed on the surcharge for delinquent payment; 7.Offer commodity tax related incentives to encourage green energy industries and carbon reduction; 8.Offer vehicle license tax related incentives to electric vehicles and social welfare group vehicles; 9.Amend individual income tax, corporate income tax and withholding tax on foreign shareholders’ dividends related rules to improve income tax system; ...


1.為維護國家債權,延長重大欠稅案件之執行期間;2. 調降現股當日沖銷交易證券交易稅率;3. 完備反避稅機制;4. 調增菸酒稅、遺產及贈與稅以做為長照特種基金財源; 5.修正稅捐稽徵法定明財政部得本互惠原則與其他國家(地區)簽訂稅務用途資訊交換等之條約或協定; 6.刪除滯納金加徵利息等相關規定;7.增訂貨物稅優惠以鼓勵發展綠能產業及增進節能減碳;8.提供使用牌照稅優惠予電動汽機車及社福團體用車;9.修改綜所稅、營所稅及外國股東股利課徵等以優化所得稅制;...

Taiwan-source income reporting rules for foreign electronic service providers


February 08, 2018

As from May 1, 2017, foreign entities providing cross-border e-services to individuals in Taiwan should register with Taiwan’s tax authorities for VAT filing purposes. In January 2018, the Ministry of Finance not only amended Taiwan-source income recognition regulations, but also issued a tax ruling (which takes effect retroactively from January 1, 2017) providing the guidance on determining Taiwan-source income derived from the provision of cross-border e-services by foreign entities in both B2C and B2B transactions.  The points of the tax ruling include: definition of e-services, e-service sales models (platform or non-platform), how to recognize Taiwan-source income, how to calculate taxable income (=profit [actual or deemed, e.g., standard industry profit rate or 30%] x contribution rate [actual or deemed, e.g., 100% or 50%] x tax rate), tax reporting obligation (withholding or return filing), tax refund for overpaid withholding tax, etc.



VAT reporting status for foreign electronic service providers


February 07, 2018

As from May 1, 2017, a foreign entity without a fixed place of business in Taiwan providing cross-border e-services to domestic individuals should register and pay VAT if the annual sales amount exceeds NT$480,000.  For this VAT registration topic, many tax laws were amended and corresponding tax rulings were issued one by one. Furthermore, in early 2018, Taiwan-source income reporting rules for foreign e-service providers were also announced.  According to the newsletter from Ministry of Finance, up to February 1, 2018, 74 foreign e-service providers had registered and reported the sales amount of NT$43 billion with VAT of NT$1.8 billion paid for the period from May to December of 2017.



Flowcharts for TP safe harbor rules


January 03, 2018

To evaluate the impact of 3-tiered TP documentation system effective from FY 2017, companies should understand TP safe harbor rules. Ministry of Finance has issued related tax rulings or newsletters with different flowcharts for companies’ easy reference.  Those flowcharts include: “1) the disclosure of related parties and controlled transactions; 2) safe harbor rules for Local File; 3) safe harbor rules for Master File; 4) safe harbor rules for Country-by-Country Report; 5) how to submit CbCR.”


自2017年度起,移轉訂價三層報告架構確立,營利事業應知悉相關避風港法則。財政部為便於營利事業判斷是否應揭露關係人交易,以及應否備妥移轉訂價報告、集團主檔報告、國別報告等,會隨歷次解釋函令或新聞稿發佈各種流程圖以供判斷,包括:1)應揭露關係人及關係人交易資料之範圍; 2)應否備妥移轉訂價報告檢視方法; 3)集團主檔報告避風港檢視圖示; 4)國別報告避風港檢視圖示; 5)送交國別報告方式圖示。

3-tiered TP documentation comes into effect!


January 02, 2018

On November 13, 2017, Taiwan’s Ministry of Finance (MOF) announced the amendment to the transfer pricing guidelines adopting the OECD’s BEPS Action 13 guidance. The revised guidelines introduced a 3-tiered transfer pricing documentation regime that would be applicable to fiscal years beginning on or after January 1, 2017
(FY2017). Taxpayers that meet certain criteria would have to provide a country-by-country report (CbCR), a master file (MF), and a local file (LF). MOF also issued a tax ruling dated December 13, 2017 to specify the safe harbor rules for CbCR and MF.

台灣財政部參酌經濟合作暨發展組織(OECD)發布稅基侵蝕及利潤移轉(BEPS)行動計畫13之成果並配合我國稅制,於2017年11月13日公布我國「營利事業所得稅不合常規移轉訂價查核準則」修正案,即自2017年度起符合一定要件下,營利事業應備妥移轉訂價三層報告,即國別報告 (Country-by-Country Report, CbCR)、集團主檔報告 (Master File) 及移轉訂價報告 (Local File);同時為兼顧跨國企業集團製作移轉訂價文據之遵循成本,我國財政部亦於2017年12月13日公告跨國企業集團在我國得免送交「集團主檔報告」及「國別報告」之避風港標準。

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