RSM Taiwan
Languages

Languages

Tax relief and support for business and individual

 

Due to the outbreak of COVID-19, a range of Taiwan enterprises have suffered from the impact of COVID-19. Therefore Taiwan government has released a series of tax relief in March 2020, which the Ministry of Finance has granted the tax relief measures as below.

01. A taxpayer who is ordered into isolation for medical treatment due to COVID-19 infection or who are placed under home isolation after having contact with confirmed cases, or home quarantine after having traveled to pandemic-ridden nations and areas, the tax payment listed below will be allowed to extend for those levied in the three-month period from March to May.

  • What taxes are qualified for this relief measure?
    VAT, commodity tax, tobacco and alcohol tax, the specifically selected goods and services tax, withholding tax, license tax, income tax and house tax.

  • Who is eligible for the relief measure?
    A.    Individual
    B.    Business
    C.    Tax withholder

The relief measures can be applied while declaring or paying the tax bill without submitting an application in advance.
 

02. A taxpayer who is ordered into isolation for medical treatment due to COVID-19 infection or who are placed under home isolation after having contact with confirmed cases, or home quarantine after having traveled to pandemic-ridden nations and areas, the tax payer will be allowed to enjoy the right to delay their payment of certain taxes or installment.
✓  Without the restriction of the tax amount
✓  Can be extended up to one year 
✓  Can be paid in installment for up to 36 months 

  • Who is eligible for the relief measure?
    A.    Business
    (1)  The companies incorporated in accordance with Company Act or the small businesses exempted from registration in accordance with Business Registration Act.
    (2)  The average revenue from January 2020, for any two consecutive months, is less than the amount of six months before December 2019 or the same period at least 15%.

    B.    Individual
    (1)   The employer who carries out the policy of cutting the workday due to COVID-19.
    (2)  The employee whose salary was cut due to COVID-19.
    (3)  The employee who was laid off due to COVID-19.
    (4)  The employee whose workdays was cut and reached a proportion of 1/2 and more than 2 months.

  • Applicable period
    From January 1, 2020 to June 30, 2021; the period may be extended with the consent of the Legislative Yuan.
     

03. The employee who takes leaves due to COVID-19 related reasons and the employer willing to pay the salary, the businesses are eligible to deduct 200% of the salary expenses.

  • Who is the eligible employee for the relief measure?
    The employee who suffers from COVID-19, the person who takes care of the infected person, or the person who complies with the contingency directions to take leaves (i.e. family take leaves to take care of their children due to the postpone of school day.)

  • Tax Effect
    A 200% of salary expense given to the employees due to COVID-19 related reason is allowed to deduct while filing the corporate income tax return.

  • Supporting document
    (1)    Leave notices / records etc.
    (2)    Isolation treatment notices from the competent authority, isolation notices or notices of quarantine etc.

The relief measure can be applied while declaring or paying the tax bill without submitting an application in advance.
 

04. The tax authorities shall reduce the tax rate after assessing the operation

  • Who is eligible for the relief measure?
    The small business whose business tax is assessed and determined by the tax authority regardless of actual sales amount

  • Application procedures
    (1)  File out the application
    (2) Submit or send by mail to the tax authorities
     

05. Hotel resort industries which shut down partial floors

Due to the impact of COVID-19, the landlords are able to apply for reducing the house tax from 3% to 2% which the hotel shutdown partial floors.
 

06. Entertainment industries are allowed to reduce the VAT

  • Who is eligible for the relief measure? 
    (1)    The revenue decreased
    (2)    The operating days is reduced

The aforesaid businesses are able to apply for reducing the assessed VAT in proportion to the unused operating days or unused entertainment facilities.
 

07. Government-invested Banks carry out the measure of reducing the interest rate

  1.  Loans used for self-residential house
    The loans which are less than NTD 10 million shall enjoy the rights to cut rates with 0.5%, the applicable period is from April 1, 2020 to September 30, 2020. The interest rate for the rest amount which over NTD 10 million shall be reduced by 0.25%.

  2. Consumer loans
    Credit card, consumer credit, car loans and other loans which is outside the self-residential loan, the interest rate shall be reduced by 0.75% for the loans less than NTD 10 million, and applicable period is from April 1, 2020 to September 30, 2020; the interest rate for the rest amount of the loans which over NTD 10 million shall be reduced by 0.25%.

  3. Applicable scope and implement process
    Additional or original loans are both applicable, and the government-invested banks will cut rates automatically, the applicants are not required to apply for the reduction by themselves.
     

08. Bailout (fund demanding)

  • Original loans are allowed to extend the period for repayment
    Rate: 0.81%
    Subsidies for interest: cap for NTD220,000 /each entity.
    Applicable period: maximum 1 year.

  • Loan for operating fund
    Rate: cap for 1.845%
    Subsidies for interest: cap for NTD55,000 /each entity.
    Applicable period: maximum 6 months.

  • Fund for revitalization
    Rate: cap for 0.845%
    Subsidies for interest: cap for NTD220,000 /each entity .
    Applicable period: maximum 1 year.