Taiwan To Introduce Tax Breaks To Boost Economy

by Mary Swire, Tax-News.com, Hong Kong

18 September 2001

It was revealed recently that despite having warned earlier this year that business tax cuts were unlikely, as Taiwan was the 'least burdened country in terms of taxes,' the Taiwanese government has approved a proposal to exempt the regional offices of foreign companies from revenue taxation.

The proposal, which is expected to be approved by the legislature when it reconvenes this week, will exempt regional offices above a certain size from tax on their royalties, service revenues, research revenues, and other sources of income. According to a Cabinet spokesman, the government is also planning to reduce the price of public owned land leased or purchased by foreign companies setting up regional headquarters on the island.

These measures, which are part of a package designed to stimulate the ailing Taiwanese economy, follow the reduction of land tax at the end of August, which was criticised as only being of benefit to wealthy investors and landowners, and the lifting of restrictions on mainland investment in property.

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