On 29 March 2019, the National Taxation Bureau of the Southern Area (NTBSA) of Taiwan published a notice upon important information about the new profit-seeking enterprise income tax reform when filing in 2019. According to the newly amended Income Tax Act circulated, the following changes went into force:
-The income tax rate for profit-seeking companies differs in each of the three consecutive years starting with the tax filing in 2019 (the tax year 2018).The income tax rate for profit-seeking companies will rise from the current 17% to 20%. If the total taxable income of a company is less than NT $ 500,000, the income tax rate will be gradually increased by 1% per annum to 20%;
-Tax rate on retained earnings has been decreased from 10% to 5% for the taxable year 2018 (filing year 2020) onwards, the retained earnings tax is levied at a rate of 5% and the taxable years 1998 to 2017 (filing years 2000 to 2019), any earnings of the current year not distributed by a profit-seeking enterprise are subject to an additional tax at a rate of 10%;
-Withholding tax rate on dividends has been increased from 20% to 21% for dividends distributed to non-residents from 1 January 2018;and
-Because of the abolishment of the imputation tax system, profit-seeking enterprises will no longer be required to set up a shareholder imputation credit account or to update the records in such account.
