The Ministry of Finance (MOF) said on Wednesday that it expects to adopt a 15 percent minimum multinational corporation tax rate on Jan. 1, 2024 at the earliest after European Union member states reached agreement on the minimum tax rate earlier this week.
The MOF said it is studying the possibility of raising the local minimum business tax rate from the current 12 percent to 15 percent, and as the change requires no revision of existing laws, the Executive Yuan is able to announce and implement the change without submitting the proposal to the Legislature.
The minimum taxation component, known as the Pillar 2 Directive, has been part of the Organisation for Economic Co-operation and Development's (OECD) reform of international taxation since about 140 countries in the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) struck a landmark agreement on international tax reform in October 2020.
In addition to Pillar 2, the tax reform also includes the Pillar 1 Directive, which covers a new mechanism of allocating taxing rights over the largest multinationals to jurisdictions where profits are earned.
After the EU reached agreement on the minimum corporation tax rate, PwC Taiwan said in a statement that the European bloc has set a timeframe to implement the new tax scheme on Dec. 31, 2023.
In response, the MOF said Taiwan was aware of the EU agreement on a minimum tax rate as EU members are the major countries under the Inclusive Framework on BEPS, while South Korea, a neighbor of Taiwan, is expected to implement the minimum tax rate on Jan. 1. 2024.
The MOF noted that the Taxation Administration will submit a report on implementation of the new tax scheme to the Cabinet in the near future, with the earliest implementation date set for Jan. 1, 2024.
Source: Focus Taiwan News Channel