Overview
According to the Act, a foreign company engaged in international transport involving Taiwan, in construction contracting, providing technical services, or leasing machinery / equipment and the costs / expenses are difficult to calculate, regardless whether or not it has a branch office or business agent in Taiwan, may apply for approval to consider 10% or 15% of its total business revenue as its income derived within Taiwan. And the resulting gross withholding rate will become 2% or 3% (=assessed profit rate at 10% or 15% * regular withholding rate at 20%).
Reduced Rates
| Type | Deemed Profit Rate (a) | Tax Rate (b) | Withholding Rate (c=a*b) |
|---|---|---|---|
| International transport involving Taiwan | 10% | 20% | 2% |
| Construction contracting | 15% | 20% | 3% |
| Providing technical services | 15% | 20% | 3% |
| Leasing machinery / equipment | 15% | 20% | 3% |
Procedures
The case will be submitted to the National Taxation Bureau of the area, and it generally takes 2-4 weeks to address the issues.
Assessment
Usually only the contract will be assessed, and the evidence of service provision is not required.