Source: https://rivet.global/blog/taiwan-companies-paying-foreign-providers-withholding
Published: 2026-10-21 · Updated: 2026-10-21 · By Rashidatou K.

# Taiwanese companies paying foreign service providers: withholding tax and exemptions

Taiwan withholds tax on many payments to foreign companies without a fixed place of business in Taiwan. The common rates, the exemptions for services abroad, and filing.

## Key takeaways

- Taiwan withholds tax on Taiwan-source income paid to foreign companies without a fixed place of business or agent in Taiwan.
- The general withholding rate for such payments, including royalties and many service fees, is 20 percent.
- Services performed entirely outside Taiwan may be treated as foreign-source, and some technical services can qualify for reduced treatment with approval.
- Withholding is paid and reported by the 10th of the month after payment.

A Hsinchu chip design startup pays a Japanese consultancy NT$1.8 million for engineering advice, partly delivered on site in Taiwan and partly remotely from Tokyo. Its accountant splits the fee: the work performed in Taiwan is Taiwan-source and subject to withholding, unless the Japan-Taiwan arrangement changes it; the remote work may not be.

## The rule

Taiwan withholds tax on Taiwan-source income paid to foreign companies that have no fixed place of business or business agent in Taiwan. Common cases:

- royalties for the use of patents, software or know-how in Taiwan,
- fees for services performed in Taiwan,
- interest and some other income.

## Rates

The general withholding rate on such payments is 20 percent. Tax treaties and special arrangements can reduce it. Some technical service fees and royalties can qualify for reduced treatment with approval from the tax authority.

## Where the service happens

Services performed entirely outside Taiwan may be treated as foreign-source. The tax authority looks at where the work is performed and where it is used. Contracts that separate on-site and remote work make the analysis easier.

## Filing

The payer withholds the tax and pays it by the 10th of the month after payment, filing a withholding statement. Penalties apply for failing to withhold.

## Agree gross or net

Foreign providers often quote net. If the Taiwanese company grosses up, it bears the 20 percent on top. Settle it in the contract.

## Where Rivet fits

Rivet does not file Taiwanese withholding tax. A Rivet business account accepts registered companies after verification, subject to local rules, and pays providers in 120+ countries with each payment matched to its invoice. Rivet is not a bank; regulated partner institutions hold the funds.

## Questions

### When does Taiwan withhold tax on payments to foreign companies?

When the payment is Taiwan-source income, such as royalties for use in Taiwan or service fees for services performed in Taiwan, and the recipient has no fixed place of business in Taiwan.

### What is the rate?

Generally 20 percent, subject to tax treaties and special approvals.

### Are services performed abroad taxed?

Services performed wholly outside Taiwan may be foreign-source and not subject to withholding. The tax authority looks at where the service is performed and used.

### When is withholding due?

By the 10th day of the month after payment, with a withholding statement filed.