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Incentives for doing business in Taiwan: Company Taxes
By George Liu
Taiwan News, Staff Reporter
2014-08-13 12:09 PM

This article is part of an ongoing series detailing incentives offered by cities, counties, and the central government to companies operating in Taiwan. The goal of these pieces is to raise awareness among foreign enterprise as to the advantages of doing business in Taiwan and attract foreign participation in Taiwan’s economy. Hopefully, the information presented herein will incite interest in various locales on this beautiful island and prompt interested parties to seek further information.

In accordance with the provisions of Article 10 of the Statute for Innovation industrial promulgated and enacted May 12, 2010, a company may be entitled to a tax credit of up to 15% of the R&D expenditure against its income tax liability. The credit is limited to 30% of the income tax payable for the current year. This effective term of said incentive will be from January 1, 2010 to December 31, 2019. The Ministry of Finance and the Ministry of Economic Affairs jointly stipulate the "Rules for Application of investment Credits to Corporate Research and Development Expenditures" and the qualified scope of said R&D credit is limited to expenditure for R&D activities of a highly innovative, pioneering, risky, and external nature.

Companies shall apply to competent authorities to determine the qualified scope of R&D activities within the period starting from three months before the start of income tax return filings to one month after the deadline of income tax return filing (For example, February to June of the following year for company adopting a fiscal year). In addition, for certain R&D expenditure, the companies should apply for special approval with the competent authorities before the end of the year when said expense is incurred.

For more information, please contact the Department of Investment Services, Ministry of Economic Affairs at (02) 2391-4950.

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