With the increasing frequency of cross-border online transactions, many profit-seeking enterprises purchase electronic services from foreign profit- seeking enterprises through the internet or other electronic means. In response, National Taxation Bureau of the Southern Area, Ministry of Finance stated that, when profit-seeking enterprises in Taiwan pay such fees, if the income is sourced from the R.O.C., the tax withholders (i.e., the domestic profit-seeking enterprise) should withhold tax according to the Income Tax Act. However, if the country where the foreign profit-seeking enterprise is located has signed a comprehensive tax treaty with Taiwan, it can apply for tax reduction or exemption under that treaty.

The Bureau further explained that as of October 31, 2025, Taiwan had signed and entered into comprehensive tax treaties with 35 countries and regions. If a foreign profit-seeking enterprise 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 its business profits derived from the cross-border sale of electronic services to domestic profit-seeking enterprises. This application should be submitted by the company itself or through an agent, by completing the “Application Form for a Foreign profit-seeking Enterprise Performing Cross-border Sales of Electronic Services to Exempt its Business Profits from Tax under an Agreement for the Avoidance of Double Taxation” and attaching documents such as a certificate of residence issued by the tax authority of the country or region where foreign company is located, a copy of the contract, a power of attorney, and relevant income documentation. The application should be submitted to the National Taxation Bureau in the payer’s location. If the domestic profit-seeking enterprise has already paid taxes according to the withholding tax rates for various types of income before applying for the income tax treaty benefits, the enterprise can apply for a refund of the overpaid taxes from the National Taxation Bureau after obtaining the approval letter for the income tax exemption.

The Bureau would like to remind businesses engaging in transactions with overseas e-commerce companies to check whether the country or region where the overseas e-commerce company is located has signed a comprehensive tax treaty with Taiwan, and to apply for the benefits under 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 Treaties” section of 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.
 

Press Release Contact: Mr. Chang
Profit-seeking Enterprise Income Tax Division
TEL: 06-2223111 ext.8035