Can you someone tell me what is the tax consequences for foreign companies between opening up a branch company in Taiwan or having a subsidiary in Taiwan? I feel that the differences between the 2 are the same and would appreciate anyone that can provide some leads.
- 10 年前最佳解答
So i will also try to answer your question by English lo...
The main takeaway is this:
- opening a branch company in Taiwan will avoid withholding tax on dividend to
the main parent company. The branch company is subject to income tax of
20%, like all other Taiwan companies. There is also a business tax of 5%, but
that is the same with all other Taiwan company. After the end of the year, the
remaining profit, after taking account into the 20% tax, will no longer be taxed
and can be transmitted to the parent company in Hong Kong.
- this is compared to having a subsidiary in Taiwan, where the dividend
contribution to the parent company will be subject to a dividend withholding tax
of 20% (unless tax treaty, but none with Hong Kong). On the other hand, if you
do not distribute dividend, you will also face penalty of 10% on undistributed