Income Tax on House and Land Transactions(effective on July 1, 2021)

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    The tax system of income tax on the integrated income from house and land transactions was first introduced on January 1, 2016 and amended in 2021. Taking effect from July 1, 2021 onwards, the latest regulations of the amendment are briefly introduced as follows:

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Tax Scope

Income derived from transactions of the following:

• House or land acquired on or after January 1, 2016.

• The right to use a house by the creation of superficies acquired on or after January 1, 2016.

• Presale house with its building location acquired on or after January 1, 2016.

• The shares or capital, where more than half of the total number of shares or the total amount of capital of an enterprise within or outside Taiwan are/is directly or indirectly held by an individual, and at least 50% of the value of such shares or capital are constituted by house and land within the territory of Taiwan; however, such shall not apply if the shares are stocks in listed, OTC-listed, or emerging stock companies.

• 45% tax for foreign corporations having the property transaction gains on buildings or land sold within 2 years of purchase; 35%  tax for foreign corporations having the property transaction gains on buildings or land sold over 2 years.

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Tax Base and Declaration

Tax Base = the Revenue from the Transaction of House and Land－Costs－Expenses－the Total Increment Amounts of Land Value

An Individual shall fill out and file to the tax collection authority-in-charge the tax return within 30 days from the day as set forth below, attached with a photocopy of the contract and other relevant documents:

• The day following the day on which the ownership transfer registration of house or land is completed.

• The day following the transaction day of the right to use a house by creation of superficies.

• The day following the transaction day of presale house with its building location.

• The day following the transaction day of shares or capital that shall be regarded as the transactions of house and land.

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Tax Rates

• Domestic private individuals 

  • Held no more than 2 years: 45%；

  • Held more than 2 years, but no more than 5 years: 35%；

  • Held more than 5 years, but no more than 10 years: 20%；

  • Held more than 10 years: 15%；

  • House and land that have been held for a period of no more than 5 years are transferred because of a job transfer, involuntary separation from employment, or any other involuntary cause announced by the Ministry of Finance: 20%；

  • An individual who sells house and land where the house is built in partnership with a business entity, and the share of land associated with the unit has been held for a period of no more than 5 years, shall be taxed at 20%；

  • The portion of taxable income amount on self-use residence exceeds NT$ 4 million: 10%；

  • House and the share of land associated with the house that are transferred for the first time after the completion of construction and have been held for a period of no more than 5 years, where the house and land are acquired through participation in urban renewal by providing land, legal buildings, other rights, or capital in accordance with the Urban Renewal Act or the participation in reconstruction in accordance with the Statute for Expediting Reconstruction of Urban Unsafe and Old Buildings: 20%.

  • filing period: within 30 days after the transaction

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• Foreign private individuals 

  • Held no more than 2 years: 45%；

  • Held more than 2 years: 35%；

  • filing period: within 30 days after the transaction

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• Domestic Corporations

  • Held no more than 2 years: 45%；

  • Held more than 2 years:  35%；

  • filing period: combine filing with company income tax

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• Foreign Corporations ( Taiwan branch of a foreign company)

  • Held no more than 2 years: 45%；

  • Held more than 2 years:  35%；

  • filing period: combine filing with company income tax

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Penalties

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• Individuals ​

  • Failure to file within the time limit: A fine in the amount of more than NT$3,000 but not more than NT$30,000 shall be imposed. In the case of failure to file tax, and the amount of taxable income and tax payable are determined by the tax collection authority based on the available data, the taxpayer shall be subject to a fine of not more than three times the amount of tax determined as payable. However, the tax collection authority will choose the more severe one between the aforementioned fines as the final punishment.

  • Filing on time but late payment: A delinquency charge in an amount equal to one percent of the amount of tax payable shall be charged for every two days of delay. When the period of delay exceeds thirty days, the case shall be referred to the Administrative Enforcement Agency for enforcement.

  • Omission or misfiling: A fine of a maximum of twice the amount of the tax evaded.

• ​​Corporations

  • Failure to file an annual income tax return, any omission or misfiling of income taxable hereunder shall be subject to a fine of no more than twice the amount of the tax evaded.​

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