Taiwan: Taxes and Costs

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Rental income tax is high in Taiwan

Effective Tax Rate on Rental Income
Monthly Income	US$1,500	US$6,000	US$12,000
Tax Rate	20%	20%	20%
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INDIVIDUAL TAXATION

Non-residents, individuals who were in Taiwan for less than 183 days during a calendar year, are taxed on their Taiwanese-sourced income. Married couples are generally taxed jointly but a couple can opt for separate taxation.

INCOME TAX

The income earned by non-residents is taxed at a flat rate of 20%, withheld at source. No exemptions and deductions are allowable.

VALUE ADDED TAX (VAT)

Value Added Tax (VAT) is 5% of gross rental income. Business Turnover Tax of 1% may be charged for small scale enterprises in lieu of VAT if rent is paid directly to an individual, not a company.

CAPITAL GAINS TAX

Capital gains realized by non-residents are treated as regular income and subject to a personal tax rate of 20%. The taxable gain is the difference between the selling price and the property cost (acquisition costs, improvement costs, transfer costs).

Land Value Increment Tax

Gains for the sale of land are exempt from income tax but are taxed under the Land Value Increment Tax (LVIT). The tax base is the increased value of the property which is computed by deducting the acquisition costs and improvement costs from the property’s market value at the time of the transfer. The taxable gain is adjusted to take account the changes in the consumer price index. The rates of the land value increment tax range from 40% to 60%, depending on the taxable gain. For owner-occupied residential land, this tax is levied at a flat rate of 10% under certain conditions.

PROPERTY TAX

House Tax

The owner of a house for residential use is taxed annually at a rate of 1.38% of its current assessed value. The tax rate is determined by the county (province) or city government as approved by the local people’s assembly.

Land Value Tax

This tax is levied on the value of land, as assessed by the government. Land tax is computed by comparing the starting cumulative value (SCV) and the current assessed land value (LV) and taking the difference between them using a confusing formula. The SCV is a constant figure set by the government for each province or municipality, LV is likewise assigned by the Government. Both values are updated every three years. Land for residential use is taxed at a flat rate of 0.2%. Land used for other purposes is taxed at progressive rates, ranging from 1% to 5.5%.

Taiwan - more data and information

• Guide to buying houses and registering property sales in Taiwan

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