Based on the principle of "the Rule of Law" and "Doctrine of Taxation by Law", the collection of taxes in Taiwan should be regulated by laws. The tax collection procedures are based on Tax Collection Act for the unification of procedures, and should comply with the Taxpayer Rights Protection Act (which will be implemented on December 28, 2017) and the Administrative Procedure Law, to make tax collection procedures transparent, to assure the "Rule by Law" principle being implemented, to protect the rights/benefits of people and to enhance the effectiveness of administration. Every tax is collected by National Taxation Bureaus (National Taxes) or Tax Collection Offices in special municipalities, counties or cities (Local Taxes). Ministry of Finance is the highest administration to centrally handle tax collection matters, issuance of rulings for tax laws/regulations, and designation of revenue and spending.

In response to demands arising from the development of economic situations, Taiwan has undergone numerous tax reforms. For example:

• To enhance the competitiveness of the taxation environment in Taiwan
  • Imputation system was implemented in 1998
  • The period of loss carryforward was extended from 5 years to 10 years in 2009.
  • Tonnage Tax for Shipping Industry has been imposed since 2011.
• To maintain the fairness in taxation as well as the demand arising from the development of economic situations
  • Transfer Pricing Assessment Rules were announced in 2005.
  • Alternative Minimum Tax was implemented in 2006
  • The Statute for Industrial Innovation was promulgated in 2010 to replace the Statute for Upgrading Industries.
  • Anti-thin Capitalization Rule was implemented in 2011.
  • The Specifically Selected Goods and Services Tax Act was implemented in 2011
  • The taxation on dividends was changed from full imputation to partial imputation in 2015.
  • Income Tax on House and Land Transactions was implemented in 2016.
  • By abolishing the partial imputation tax system on dividends, a new dividend tax regime was put into practice in 2018.
• To eliminate double taxation on cross-border transactions and to promote international trade
  • Taiwan government has concluded tax treaties with 32 jurisdictions.
  • "Regulations Governing Tax Exemptions under the Cross-Strait Sea Transport Agreement and Air Transport Supplementary Agreement " was promulgated.

For more information, please visit Taxation Administration and eTax Portal