Taiwan’s tax policies more attractive than China’s incentives: MOF

Photo courtesy of CNA

Taipei, March 10 (CNA) The Ministry of Finance (MOF) underscored how Taiwan’s tax policies for businesses and professionals are more competitive than China’s, even with Beijing’s recently announced 31 new measures designed to attract Taiwanese companies and individuals to the mainland.

The MOF noted that Taiwan gives businesses multiple tax benefits, including a tax break for angel investors of up to NT$3 million (US$100,000) under the 2017 amendments to the Statute for Industrial Innovation.

Meanwhile, China’s incentives do nothing more than subject Taiwanese firms and individuals to the same tax policies that govern domestic enterprises and talent, according to the ministry.

Comparing major taxes side by side, the MOF finds that Taiwan’s effective tax rates for corporations is 13-14 percent across all companies, whereas China has a 15 percent effective tax rate for companies in the high-earning tech industry.

Furthermore, the highest income tax rate for individuals is 40 percent in Taiwan and 45 percent in China.

Moreover, some of China’s new tax schemes, the MOF notes, are actually copied from Taiwan, for example providing development and innovation centers with a full refund on their taxes for purchased equipment.

The MOF was also quick to note that tax policies are only one of the factors affecting corporate investments and talent flow.

Others such as regulations on the flow of capital will play an equally important role in determining how Taiwanese choose to respond to China’s incentive package.

(By Tsai Yi-chu and Kuan-lin Liu)