The National Taxation Bureau of the Southern Area, Ministry of Finance notes that many foreign profit-seeking enterprises have various incomes derived from sources in the Republic of China (R.O.C.) through all sorts of business deals. However, not every enterprise fully understands how to file income tax return and pay tax in accordance with the tax regulations.
The Bureau further explains that while a profit-seeking enterprise without permanent establishment or business agent in the R.O.C. (hereinafter "foreign profit-seeking enterprise") has income derived from the R.O.C. as provided in Article 88 of the Income Tax Act (hereinafter "the Act"), the tax withholder shall withhold the income tax payable in accordance with prescribed withholding rates. The Bureau would like to issue a reminder that the withholding rate of the dividends or earnings distributed or attributable to a foreign profit-seeking enterprise was raised from 20% to 21% on January 1, 2018.
However, if a foreign profit-seeking enterprise has income in the taxable year which does not fall within the withholding scope as provided under Article 88 of the Act, and is unable to conduct the filing by itself, the enterprise shall apply to the tax authority for approval and appoint an individual residing in the R.OC. or a profit-seeking enterprise with a fixed place of business to file the tax return and make tax payment as an agent in accordance with Paragraph 2, Article 60 of the Enforcement Rules of the Income Tax Act.
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