A non-resident company whose head office is located outside of Taiwan must keep separate books for its branch in Taiwan. A head office or regional headquarters’ general and administrative expenses may be allocated to the branch under certain conditions. CIT is assessed only on the branch’s profits. A Taiwan branch should complete an annual CIT return.
A Taiwan branch of a foreign company may remit after-tax profits to its foreign head office without further tax due.
Motion picture leasing
A foreign motion picture’s branch in Taiwan can deem 45% of its revenue from leasing of motion pictures as cost. However, if a foreign enterprise with no branch office in Taiwan leases motion pictures through agents, 50% of the revenues can be deemed as taxable income.
A non-resident company that is engaged in international transportation, construction contracting, provision of technical services, or machinery and equipment leasing within Taiwan, and where the cost and expenses are proven to be difficult to calculate, may apply for advance approval from the National Tax Administration (NTA) to adopt the deemed-profit method to determine the taxable income as 10% or 15% of the gross revenues. This will effectively reduce the WHT rate to 2% or 3% on gross revenues once the approval is obtained from the NTA.
A non-resident company having income derived from business operation in Taiwan may also seek approval from the NTA to be taxed on net profit by claiming actual costs or applying a deemed-profit ratio based on its industry.
For non-resident enterprises providing cross-border electronic services to Taiwanese buyers (including individuals and profit-seeking enterprises and organisations), the non-resident company may apply to the NTA to adopt a deemed-profit method based on its business model and industry.