Advance Ruling - Application under Article 25 of the Income Tax Law
Generally speaking, a withholding tax of 20% is charged to Taiwan-source income of foreign companies with no permanent establishment in Taiwan. Article 25 of Taiwan's Income Tax Law, on the other hand, states that when a company with its head office situated outside of Taiwan that provides technical services or equipment rental within the territory of ROC has difficulty calculating and apportioning costs, the company may lodge an application with the Ministry of Finance to treat 15% of its ROC-source income as its deemed taxable income. This means that, with proper authorization, the withholding tax rate for a foreign company in Taiwan may, under certain specific conditions, be reduced to effectively 3% via advance ruling.
Grant Thornton tax specialists have years of experience assisting clients to apply for advance ruling with the Ministry of Finance. We will both assist you to present your case and guide you away from possible pitfalls.