Before 1 August 2005 payments to foreign film providers have been exempt from tax in Taiwan, if the films were provided for a certain time period without the permission to reproduce the films (on the basis of a 1979 ruling).
The Taiwanese Ministry of Finance has abolished the 1979 ruling, and now the situation is as follows: a foreign film provider with a branch office or business agent in Taiwan needs to file an income tax return and pay 25% tax on the realised taxable income. For a branch office the income will be revenue minus 45% deemed costs and the real expenses. For business agents the taxable income is 50% of the turnover. For other foreign film providers all payments will be due to a 20% withholding tax (but subject to restricting tax treaty provisions).