Guide to Taiwan Land Value Tax-Company Formation_Trademark Registration_Tax Service - Hong Kong CPA

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Guide to Taiwan Land Value Tax

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Scope of Taxation

The land value tax is imposed on a taxpayer’s total urban and rural land that has been assigned a land value in each municipality directly administered by the central government or county.
Taxpayers

Taxpayers of the land value tax are:
(a) The landowner.
(b) The assignor of a dien right.
(c) The transferee of land granted.
(d) For land designated for farming, the farmer.
(e) The administration-in-charge for publicly owned land.
(f) The administrator for commonly owned land.
(g) The joint owners of jointly owned land for their respective portions.
(h) For land owned by a trust, the trustee for the duration of the trust.

The tax authorities may designate land users to be responsible for paying the land value tax in the following cases:
(a) The whereabouts of the legal taxpayer is unknown.
(b) The land is under no one’s control.
(c) The title to the land is unclear.
(d) A landowner petitions for the occupant to pay the tax.
Tax Base

The taxpayer must declare the value of his/her land with reference to the posted value announced publicly by the Land Value Assessment Commission. The declared land value should be 80% to 120% of the posted value. If the land owner has not declared the value of his/her land during the announcement period, the value would be 80% of the posted value.
Starting Cumulative Value

The tax base of the land value tax is the “starting cumulative value,” determined by the average land value of seven acres in the special municipality or county where the land is located, excluding land used for factories, mining or agriculture, and land exempted from tax.

Tax Rate

The land value tax is levied at regular progressive rates or privileged rates. The progressive rates range from 10‰ to 55‰. The privileged rates apply to land used for the following purposes:

Progressive Rates and Special Rates of Land Value Tax
Purpose	Privileged Tax Rate	Remarks
Land for a self-occupied residence	2‰	The property is rated at no more than 300 square meters with an urban area or no more than 700 square meters within a rural area
Land reserved for public facilities	6‰
Land for industrial use, mining, private parks, zoos, gas stations and parking lots	10‰	If the land is for self-use during a reservation period, the tax rate is 2‰

Exemptions and Reductions

An exemption from or a reduction in the rate of land value tax may be available in the following situations:

(a) Land used by an incorporated entity (non-profit legal person, or NPJP), or by a registered private school established by an NPJP, and land used for student training in farming, forestry, fishing, animal husbandry, or mining, and dormitories for students and staff where the land is registered as NPJP property will be exempt. Land used by private tutoring or correspondence schools is not eligible for a tax reduction or exemption.

(b) Land used directly by private libraries, history or science museums, or fine art galleries established with the approval of the education authorities pursuant to the Regulations for the Establishment and Encouragement of Private Social and Educational Institutions, and academic research institutes established in compliance with the Regulations for the Establishment of Academic Research Institutions is eligible for a full exemption, provided the facilities are registered as an NPJP or established/operated by an NPJP, and the land is owned by the NPJP.

(c) Land used exclusively for private testing facilities in farming, forestry, fishing, animal husbandry, industry or mining, that are duly registered with and approved by the competent authority, and have been engaging in such testing activities for more than five years is entitled to a 50% reduction if the land use is certified by the competent authority.

(d) Land used for private cemeteries established with the approval of competent authority as an NPJP will be exempt, provided the cemetery is non-profit, and the land is zoned as public cemetery land pursuant to urban planning or zoned as non-urban land, but designated for use as cemetery.

(e) The land base for privately operated railroads, highways, or exclusive railroads and highways is entitled to full exemption, provided their construction has been approved by the competent authority, is regularly open for public use, and used for passenger and cargo transportation.

(f) Land used for agricultural irrigation systems by enterprises operating with the approval of the competent authority for water drawing, storage and drainage is entitled to full exemption; however, land used for offices and working stations by the same enterprises is entitled to a 50% reduction.

(g) Land provided without charge for use by government agencies, public schools, or military organs, troops, and schools will be entitled to a full exemption during the period of use.

(h) Land used as passages or hallways for public passage with no construction improvement is exempt from land value tax. If the above passages or hallways have construction improvements, the rate of the land value tax will be reduced as follows:

- A one-story addition, 50% reduction.
- A two-story addition, one-third reduction.
- A three-story addition, one-fourth reduction.
- A four-story addition or more, one-fifth reduction.

(i) Private land used for public passage free of charge is exempt from land value tax during the period of use, although vacant lots reserved as required under building codes are not entitled to the exemption.

Disclaimer

All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage.

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Guide to Taiwan Land Value Tax

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