Tax Concession for Taiwan Logistics Centers

Under the current Income Tax Law, a foreign enterprise is subject to Taiwanese income tax for sales to Taiwan customers if the foreign enterprise engages a domestic entity to store and deliver the goods directly to Taiwan customers. In order to mitigate such tax exposure and develop Taiwan as a regional logistics center for multinationals, a foreign corporation or its Taiwan branch which invests to set up, whether by itself or its consignee, logistics centers in Taiwan to engage in storage, processing and delivering goods to local customers is exempted from Taiwan corporate income tax on revenue derived therefrom.

1. The following four criteria shall be met in order to enjoy such tax benefit:
2. The foreign profit-seeking enterprise must own the goods shipped and stored.
3. Total sales from the logistic center must exceed two billion New Taiwan dollars per annum. For those logistic centers established for less than one year, the average monthly sales must exceed 1.67 million New Taiwan dollars.
4. The foreign profit-seeking enterprise should sign contracts outside Taiwan with domestic customers directly, or sign contracts with agents, general commission agents, or other agents of an independent status that act in the ordinary course of their business within Taiwan.