On 15 May 2019, The National Taxation Bureau of the Northern Area (NTBNA) of Taiwan published a notice upon businesses of optimized tax regulations in order to simplify the tax system and comply with international trends (the Income Tax Act was amended on 7 February 2018). The Amendments contains the following actions:
-Profit-seeking enterprises do not require to set up and record imputation credit account from 1 January 2018. This amendment should reduce the cost of tax compliance and reduce disputes.
-Profit-seeking enterprise income tax rate has been increased from 17% to 20% from 2018. In order to reduce the tax burden of low-profit enterprises and provide time adoption, profit-seeking enterprises with taxable income of less than 500,000 NTD can adopt the yearly tax rate of 18% for year 2018, yearly tax rate 19% for year 2019, and yearly tax rate 20% for year 2020.
-The income of individual proprietorships and partnership associations has been exempted from the income tax of the profit-seeking enterprise income tax from the year of 2018.
-From 2018, the tax rate for undistributed surplus earnings has been reduced from 10% to 5% to ease the company to retain earnings to make more investment and contribute to business transformation and develop.
The tax authorities also reminded companies that at the time of the introduction of the calendar year, the tax return for 2018 should be taxed at 20% in May 2019 (if the taxable income is less than NT $ 500,000, the tax rate is 18%). ) However, the tax rate on undistributed surpluses for 2017 remains at 10%.
