Taiwan and Macau Tax
Taiwan Individual Income Tax
Taiwan Individual Income Tax (IIT) rates are dependent on your residency status. You are considered a resident (for tax purposes) if you live in Taiwan at all times, or if you have stayed in Taiwan for 183 days or more during the financial year. If you have stayed in Taiwan for less than 183 days then you are classified as a non-resident. Non-residents of less than 90 days are taxed differently to non-residents of between 90 and 183 days.
The financial year in Taiwan follows the calendar year, with the end of the taxable period being December 31. The deadline to file your IIT return is May 31.
Taiwan Corporate Tax
The Corporate Income Tax (CIT) rates in Taiwan are dependent on a company’s residency status. A company is considered a resident of Taiwan if they were incorporated in Taiwan. Resident companies are required to pay tax on their worldwide income. A foreign tax credit is available for income tax paid in other countries for income earned outside of Taiwan. A non-resident company is required to pay tax on income earned within Taiwan.
The tax rate is 20% of taxable income over 120,001 TWD. Taxable income under 120,001 TWD is exempt.
Macau Individual Income Tax
Macau SAR is a tax haven for both individuals and companies. Individual Income Tax in Macau SAR is known as Professional Tax. Macau SAR have a territory based system. If you are employed by a Macau SAR based business, or you provide services in Taiwan for payment, you are required to pay professional tax regardless of;
- Your residency status,
- How many days you have spent in Taiwan,
- Where the work was performed, and
- Where the payment was received.
If income other than money is received then the Macau SAR Finance Board (MFB) may determine an equivalent monetary value and include that in your taxable income.
Macau SAR have their own currency – the Macanese Pataca (MOP). Macau SAR use a progressive income tax model. The first MOP 144,000 is tax free. The top rate which applies to any income over MOP 424,000 is 12%.
Macau Corporate Tax
Corporate tax in Macau SAR is known as Complementary Tax. There are no specific rules about residency. Domestic companies registered in Macau SAR is required to pay tax on its worldwide income. The only exception to this is rental income from immovable property located in Macau SAR. This is taxed separately. For foreign companies, the Macau SAR Finance Board (MFB) will use two criteria to determine whether that foreign company is liable to pay tax. The two criteria are whether or not they are engaged in “commercial/industrial activities and/or rendering services in Macau SAR SAR”. If a foreign company has been determined to have engaged in at least one of these then they are required to pay complementary tax on income earn from those activities.
Macau use a progressive rate for complementary tax. The highest rate is 12% which starts at income over MOP 300,000. The first MOP 32,000 is exempt, and then it starts at 3% and progresses in increments to the top bracket of 12%.