Taiwan is strategically located at the heart of the Asia Pacific region. Its economy is now the 26th largest in the world according to the International Monetary Fund’s (IMF) World Economic Outlook Database. Taiwan has averaged 6% annual growth in Gross Domestic Product (GDP) over the last 3 decades. Taiwan’s was USD523.6 billion in 2015 and per capita was USD22,989. It held the fifth largest foreign exchange reserves in the world in 2015. Taiwan is the 19th largest trading power in the world, according to the World Trade Organization (WTO), with an economy founded on high-tech and creative industries. The Economist Intelligence Unit (EIU) ranks Taiwan as the 13th best place in the world to do business to 2017. Taiwan has become one of the world’s leading economies due to its manufacturing and exporting expertise, especially in high-tech goods. Almost half of the top 100 Information Technology companies in Asia have a presence in Taiwan. Taiwan has one of the most advanced telecommunications networks in Asia. It aims to become the first market in the world that is entirely wireless, with broadband access ports located throughout the island.
Links with China
The continuing liberalisation of links across the Taiwan Strait means that foreign companies are increasingly choosing Taiwan, both as a market in its own right, and as a stepping stone into China. Taiwan has signed 27 agreements with China including the Economic Cooperation Framework Agreement. As a result China has cut tariffs on 539 items exported from Taiwan to China and further cuts are planned. Taiwan and China concluded a services agreement in 2013 which needs to be approved by the Taiwanese Legislative Yuan (parliament). If this controversial agreement is passed it should pave the way for even closer economic ties.
Taiwan joined the in 2002. The Taiwan Intellectual Property Office is responsible for the administration of patent, trademark and copyright laws. Taiwan’s patent and trademark systems have been revised and are now more in line with international standards.
Corporate income tax (CIT)
Corporate income tax is 17% on total annual taxable income over NT$120,000
Business tax is imposed on the sale of goods and services within Taiwan, as well as on the importation of goods. Taiwan has 2 business tax systems:
- Value Added Tax ()
- non-value added tax, also known as the Gross Business Receipts Tax ()
The system applies to most non-financial businesses at a standard rate of 5%.
The system applies to financial institutions, small businesses and certain restaurants. It is calculated on the basis of their gross business proceeds, at rates ranging from 0.1% to 25%.
Certain items of income received from Taiwanese entities are subject to withholding tax. This is from 5% to 20% and is different for resident and non-resident individuals.