Overseas e-commerce businesses can apply for Taiwan’s comprehensive tax treaties to reduce or exempt income tax on profits from cross-border electronic services. Taiwanese enterprises paying such fees must follow withholding rules, while eligible foreign companies can apply for treaty-based tax relief and potential refunds.
Taiwan’s Ministry of Finance has clarified on 5 December 2025 that foreign e-commerce providers selling to Taiwanese companies may qualify for reduced or exempt withholding tax under applicable tax treaties. To claim benefits, providers must submit an official application with supporting documents, and any tax withheld before approval can be refunded afterwards.
Overseas e-commerce businesses can apply for tax treaties and, under certain conditions, enjoy tax exemption on their operating profits
With the increasing frequency of cross-border online transactions, many profit-making enterprises purchase electronic services from foreign profit-making enterprises through the internet or other electronic means. In response, the Southern Taiwan National Taxation Bureau of the Ministry of Finance stated that when Taiwanese profit-making enterprises pay such fees, if the income is sourced from Taiwan, the withholding agent (i.e., the domestic profit-making enterprise) should handle the tax withholding in accordance with the Income Tax Act.
However, if the country where the overseas e-commerce company is located has signed a comprehensive tax treaty with Taiwan, it can apply for tax reduction or exemption under the treaty.
The Bureau further explained that, as of 31 October 2025, Taiwan has signed and implemented comprehensive tax treaties with 35 countries or regions. If an overseas e-commerce company is established in a country or region that has signed a comprehensive tax treaty with Taiwan, it can apply for an income tax reduction or exemption for the operating profits obtained from the cross-border sale of electronic services to Taiwanese profit-making enterprises, either directly or through an agent.
The application should include completing the “Application Form for Tax Treaty-Based Tax Exemption for Cross-border Sales of Electronic Services by Foreign Profit-Making Enterprises,” and attaching documents such as proof of residence issued by the tax authority of the overseas e-commerce company’s country or region, a copy of the contract, a letter of authorisation, and relevant income documentation.
If the Taiwanese profit-making enterprise has already paid taxes according to the withholding tax rates for various types of income before applying for the income tax treaty, the enterprise can apply to the National Taxation Bureau for a refund of any overpaid taxes after obtaining the income tax exemption approval letter.
The Bureau reminds businesses that have transactions with overseas e-commerce companies that have signed such treaties with Taiwan to check whether the country or region where the e-commerce company is located has a comprehensive tax treaty with Taiwan. Businesses should apply for the tax treaty in a timely manner to reduce their tax burden.
Information on relevant tax treaties and application forms can be found and downloaded from the “Income Tax Treaty Zone” on the Bureau’s website (https://www.ntbsa.gov.tw), or by contacting the Bureau via the toll-free hotline 0800-000-321. The Bureau is dedicated to providing detailed consultation services.
