A momentous year: recent legislative developments in Taiwan

In order to set up a company in Taiwan, it was required in the past to register with the Ministry of Economic of Affairs (MOEA) or the municipal governments for company registration, followed by profit-seeking enterprise registration and tax registration. In order to simplify the process, Taiwan abolished the requirement of profit-seeking enterprise registration in 2009. Therefore, a company in Taiwan can be set up after company registration and tax registration. However, foreign enterprises are still required to apply with the Investment Committee of MOEA before seeking company registration.

The Income Tax Law of Taiwan was amended on May 1 2009, which reduced the corporate income tax rate from 25% to 20% and became effective on January 1 2010. The threshold of taxable amount for corporate income tax has increased from NTD50,000 to NTD120,000. At the same time, certain tax ranges for personal income tax rates have been reduced from 21%, 13%, 6% to 20%, 12%, 5%, respectively.