Taiwan's Ministry of Finance has issued an interpretative order requiring peer-to-peer (P2P) lending platform operators that manage loan fund transfers to handle withholding tax obligations on interest payments to lenders from 6 August 2026.
Taiwan’s Ministry of Finance on 6 August 2026 issued an interpretative order clarifying the withholding tax requirements for interest income paid through peer-to-peer (P2P) lending platform operators.
Under the order, when a business operating a P2P lending platform provides loan-matching services between lenders and borrowers and manages the transfer of loan funds, it must withhold tax, file the required tax returns, and issue withholding (or exemption) certificates when paying interest income to lenders, in accordance with Articles 88, 89 and 92 of the Income Tax Act.
The Ministry said online lending platform services have expanded in recent years, with some P2P platform operators extending their role beyond loan matching to include interest rate pricing, transaction management and the collection of service fees from both lenders and borrowers.
According to the Ministry, interest on loans is managed either through banks or electronic payment institutions under the platform operator’s instructions, or collected and paid directly by the platform operator acting as an agent. As the platform operator exercises substantive control and management over the transfer of funds, it is regarded as the payer of the interest income and therefore qualifies as a withholding agent under Article 7, Paragraph 5, and Article 89 of the Income Tax Act.
The interpretative order specifies that when a P2P platform operator pays interest income on loan funds to a lender, it must complete all related withholding tax procedures in accordance with the law. As a result, borrowers are no longer required to carry out withholding procedures for such interest payments, simplifying the process.
The Ministry also stated that the interpretative order takes effect from the date of its issuance, 6 August 2026. For interest income paid before the order was issued, lenders must include the interest received in their annual income tax returns for the relevant tax year. P2P platform operators are not required to retroactively file withholding (or exemption) certificates for those earlier payments.
