Taiwan to adjust minimum tax rate for MNEs in 2025

Taipei, Aug. 28 (CNA) Taiwan will adjust income tax rates for multinational enterprises (MNEs) to align with the OECD's Global Minimum Tax (GMT) framework starting in 2025, the Ministry of Finance (MOF) said Wednesday.

MNEs with operations in Taiwan subject to the GMT will be taxed the Alternative Minimum Tax (AMT) of 15 percent, up from the current 12 percent, the MOF said in a statement.

The taxes will take effect when the businesses file their taxes in 2026, the MOF said.

Small and medium-sized enterprises as well as large businesses with an effective tax rate of 15 percent will not be affected, added the MOF.

According to the OECD, MNEs subject to the GMT are those with consolidated annual revenues above 750 million euros (US$834.51 million) for any two fiscal years within the past four years.

They will be subject to a 15 percent effective minimum tax rate wherever they operate.

This measure aims to reduce the incentive to shift profits to low-tax countries, while also conforming with the ability-to-pay principle, said the MOF.

Currently, 60 countries or regions around the globe have announced they will adopt the GMT framework. These include Taiwan's neighboring countries such as Japan, South Korea, Singapore and Hong Kong, as well as Taiwan's main trade partners like EU countries and Canada, said the MOF.