Social security contributions
There are compulsory social security programs that require contributions from employers and employees based on monthly insured salary, which is capped at various amounts. Taiwan social security programs include the Labour Insurance Program (LIP), National Health Insurance Program (NHIP), and Labour Pension Program (LPP). However, foreign individuals are not eligible for participating in the LPP.
Under the Second Generation National Health Insurance Program, a supplementary premium of 1.91% is applicable on bonus or incentive payments exceeding the monthly insured salary by four times (capped at TWD 10 million) on an accumulated annual basis for the employee. In addition, Taiwan local employers are required to contribute a supplementary premium of 1.91% on the difference between total monthly taxable salaries and employees’ monthly total insured salaries.
All sales of goods and services in Taiwan, as well as the importation of goods into Taiwan, are subject to business tax. There are two types of business tax systems: value-added tax (VAT) and gross business receipts tax (GBRT).
See the Other taxes section in the Corporate summary for more information.
Value-added tax (VAT)
The standard VAT rate is 5%.
Gross business receipts tax (GBRT)
GBRT is applicable to specified industries (e.g. financial institutions, small businesses) at rates ranging from 2% to 5%.
Estate and Gift Tax
Estate and Gift Tax is set at a flat rate of 10%. An exemption amount for Estate and Gift Tax is set at TWD 12 million and TWD 2.2 million, respectively.
A tax is levied on land and buildings annually. The land tax rate ranges from 1% to 5.5% of the assessed land value. The building tax rate for commercial properties is 3% to 5% of the assessed value, and the rate for non-commercial properties is 1.2% to 3.6% of the assessed value.
Selective Goods and Services Tax (also known as luxury tax) of 10% applies on various luxury products, such as upscale automobiles, yachts, private jets, helicopters, fur, ivory, high-end furniture, and membership rights.