Taiwan Investment Income Guide

Taiwan taxes investment income as part of the individual income tax system. Dividends benefit from an imputation system — shareholders choose between an 8.5% tax credit (up to TWD 80,000 refundable) or a flat 28% separate tax. Interest income is subject to 10% withholding for residents. Capital gains on securities are tax-free. All amounts in TWD.

Taiwan taxes investment income (股利所得, 利息所得) through a combination of withholding at source and annual IIT reporting. The Ministry of Finance (財政部) administers the system through regional tax offices. For related guidance, see our Personal Tax Guide →, Capital Gains Guide →, and Corporate Tax Guide →.

Dividend Taxation — Dual System

Since 2018, Taiwan allows individual resident shareholders to choose between two methods for taxing dividend income. The choice is made annually on the tax return.

Option A — Imputation credit (合併計稅): Dividend income is included in ordinary IIT. The taxpayer receives an 8.5% tax credit of the gross dividend amount, capped at TWD 80,000 per year. If the credit exceeds the tax due, the excess is refundable. This option benefits lower-income taxpayers.
Option B — Separate 28% tax (分離課稅): Dividends are taxed at a flat 28% rate and are not included in ordinary IIT. No imputation credit applies. This option benefits high-income taxpayers whose marginal IIT rate exceeds 28%.
Non-residents: Dividends paid to non-residents are subject to 21% withholding (final tax, no filing required).

Interest Income — 10% Withholding

Residents: Interest income from bank deposits, bonds, and other fixed-income instruments is subject to 10% withholding tax at source. This is generally a final tax — residents may choose to include it in their IIT return if their marginal rate is below 10% to claim a refund (otherwise, it is treated as final).
Savings deduction: For residents, the first TWD 270,000 of interest income from bank savings deposits (postal savings, demand deposits, fixed deposits) is exempt from IIT per taxpayer (TWD 540,000 for joint filers with specific conditions). Interest above this threshold is subject to ordinary IIT rates.
Non-residents: Interest is withheld at 15% (final tax).
Corporate bonds and financial bonds: Interest on bonds issued by Taiwanese companies is subject to 10% withholding for residents (separate tax).

Other Investment Income

REIT distributions: Income from Taiwan real estate investment trusts (REITs) is treated as ordinary income — included in IIT and subject to marginal rates.
Foreign investment income: Foreign dividends and interest are includible in IIT as part of worldwide income for residents. Foreign tax credits are available (limited to the Taiwan tax attributable to that income).
Annuities and insurance: Insurance proceeds from life insurance policies are generally tax-free (death benefits). Annuity payments are partially taxable (the interest component).

Tax-Free Accounts and Limits

Securities gains exemption: As detailed in the Capital Gains Guide, individual investors pay no income tax on gains from listed securities — only the 0.3% securities transaction tax.
No special investment accounts: Taiwan does not have tax-advantaged investment accounts like ISAs or TFSAs. All investment income is taxable in the year it is received, subject to the exemptions and final withholding rules above.
Minimum Tax (AMT): High-income individuals (adjusted gross income above TWD 6.7 million) and those with certain tax-exempt income may be subject to the Alternative Minimum Tax (AMT) at 12% on a broader income base.