One hundred employees enrolled in Taiwan's Labor Insurance. That headcount alone can put a Taiwan company's annual financial statements under a mandatory CPA audit, however small its paid-in capital.
Three numbers in the Company Act test
Article 20, paragraph 2 of the Company Act requires a CPA audit (查核簽證) of the financial statements of companies above a set amount of capital, or below it but above a set scale, and leaves the figures to the Ministry of Economic Affairs. The ministry fixed them in a notice dated November 8, 2018 (經商字第10702425340號), effective January 1, 2019.
Capital comes first. A company whose paid-in capital (實收資本額) is NT$30 million or more at the end of the reporting period must have its financial statements audited by a CPA before they go to the shareholders for consent or to the annual general meeting for approval. Below NT$30 million, either of two scale tests triggers the same duty: net operating revenue (營業收入淨額) reaching NT$100 million, or 100 employees enrolled in Labor Insurance (勞工保險). The scale tests apply from fiscal 2019. Companies with publicly issued shares follow the securities regulator's rules where it has made its own.
Headcount alone can be enough. A US parent's Taiwan engineering-services subsidiary might have NT$5 million of capital and 120 engineers on the Labor Insurance rolls (an invented example). Revenue is modest. Its accounts still need an audit. Each responsible person (負責人) of a company that breaches the duty faces a fine of NT$10,000 to NT$50,000. Evading, obstructing or refusing a ministry inspection, or missing a filing deadline the ministry sets, costs NT$20,000 to NT$100,000 (Company Act Article 20, paragraphs 4 and 5).
From year-end close to approval
Taiwan's Business Entity Accounting Act, Article 65, gives a business two months after year-end to complete its annual closing, with a possible extension of two and a half months. The closing produces a business report and financial statements, signed or sealed by the responsible person who represents the business, the managers (經理人) and the chief accountant (主辦會計人員) (Article 66). Within six months after year-end, the responsible person must put those statements to the owners or shareholders for approval (Article 68).
How approval works depends on the company form. In a company limited by shares (股份有限公司), the board prepares the business report, the financial statements and the proposal to distribute profits or cover losses, and hands them to the supervisors (監察人) 30 days before the annual general meeting (Company Act Article 228). From 10 days before the meeting, the documents must be available at the company for shareholders to inspect (Article 229). Once the meeting approves them, the board distributes the financial statements and the resolution to the shareholders (Article 230).
Limited companies (有限公司) work differently. There, the directors prepare the same documents and send them to each shareholder; approval takes a majority of the voting rights. Article 110 sets the latest sending date at six months after year-end, and if no objection is raised within one month after sending, the documents are deemed approved. For a calendar-year company, that means the end of June. Where an audit is required, it comes before the shareholders' approval in either form.
The tax return has its own CPA test
Corporate income tax returns follow a different rule. Income Tax Act Article 102, paragraph 2 requires businesses within a defined scope to file their annual profit-seeking enterprise income tax return with certification by a CPA or other lawful agent, and leaves the scope to the Ministry of Finance. Its regulation on CPA-certified returns (營利事業委託會計師查核簽證申報所得稅辦法, last amended December 30, 2005) lists the cases in Article 3:
| Who must file a CPA-certified return | Revenue test |
|---|---|
| Banks, credit cooperatives, trust investment, bills finance, financial leasing, securities (other than investment advisers), futures and insurance businesses | None |
| Businesses with publicly issued shares | None |
| Businesses approved for a profit-seeking enterprise income tax exemption under law | Net operating revenue plus non-operating income of NT$50 million or more |
| Businesses filing consolidated returns under the Financial Holding Company Act, the Business Mergers and Acquisitions Act or other laws | None |
| All other businesses | Net operating revenue plus non-operating income of NT$100 million or more |
Certification must come from a CPA registered with the Ministry of Finance as a tax agent. Notice the different yardstick. The Company Act looks at net operating revenue alone, while the tax test adds non-operating income (非營業收入) and ignores capital and headcount. A subsidiary can therefore meet one test and miss the other.
Each certified filing comes with the CPA's certification report (查核簽證報告書). The National Taxation Bureau of Taipei said on June 8, 2026 that calendar-year businesses had until June 1, 2026 to file and pay for tax year 2025. For CPA-certified returns filed online, the report was due on paper by June 30, or by upload by June 29. A report that is not uploaded in time turns the filing into an ordinary return (普通申報). The company then loses the ten-year loss carryforward under Income Tax Act Article 39 and the higher ceiling for deductible entertainment expenses.
What about a company that crosses the line for the first time with accounts that are not yet up to standard? The same regulation's Article 4 lets the CPA and the company apply, before the filing deadline, for the tax office's approval to start CPA-certified filing from the next fiscal year.
Books in New Taiwan dollars and Chinese
Bookkeeping falls under the Business Entity Accounting Act, which covers for-profit businesses, with its scope set by the Company Act and other laws (Article 2). Its currency rule is short. Books are kept in New Taiwan dollars (國幣), and a business that records in a foreign currency for genuine business needs must still convert into New Taiwan dollars in its year-end statements (Article 7). Entries are written in Chinese (我國文字), with Arabic numerals for figures. Under Article 8, a foreign language may be added or used alongside where there is a factual need, and the Chinese text prevails.
Retention periods come from Article 38. Vouchers must be kept for at least five years after the annual closing is completed. Books and financial statements: at least ten years. Items that must be kept permanently, or that relate to unsettled accounting matters, are outside those periods.
The accounting year runs from January 1 to December 31 unless a law provides otherwise or the business has a special operational need (Article 6). For tax, a different year needs the tax office's approval and a reason rooted in established custom or the seasonal nature of the business (Income Tax Act Article 23).
Branches of foreign companies
Branches are covered too. Article 20, paragraphs 1 to 4, of the Company Act apply to the Taiwan branch of a foreign company with the necessary changes (Company Act Article 377, paragraph 1). So the branch also faces the approval duty, the CPA-audit rule and the ministry's power to inspect and demand documents. A breach exposes the branch's responsible person in Taiwan to a fine of NT$10,000 to NT$50,000. For evading, obstructing or refusing an inspection, or missing a filing deadline, the range is NT$20,000 to NT$100,000 (same article, paragraph 2).
Does the NT$30 million capital test carry over to a branch? The branch holds operating funds that the foreign company must set aside for it (Article 372), while the ministry's notice is written in terms of paid-in capital. The notice says nothing about branches. That point needs confirming with the ministry or a CPA. On the tax side, a branch keeps its own books and computes its Taiwan income separately (Income Tax Act Article 41), and files with the tax office where it is registered (Enforcement Rules of the Income Tax Act, Article 49, paragraph 2). The wider trade-offs are covered in Entering the Taiwan Market: Key Differences Between a Subsidiary and a Branch.
Group reporting runs in parallel
For the group accounts, a US parent may need its Taiwan numbers in US dollars and on its own reporting calendar; a Vietnamese parent, in dong. How those figures enter the group accounts is a question for the parent's own accountants, and a US tax adviser can confirm how the Taiwan results flow into a US return. None of that changes the Taiwan side. The statutory books, and the statements the shareholders approve in Taiwan, still follow the rules above: New Taiwan dollars in the year-end statements and Chinese as the controlling text. Capital remittance and bank accounts at the set-up stage are discussed in Taiwan Company Formation: Capital Remittance, Banking, and Foreign Hiring.
Questions on the company-law side, such as choosing between a subsidiary and a branch or running the shareholder approval, can go to Hovering International Law Firm at wei@hoveringlaw.com.tw. The audit itself is a CPA's job, and a CPA-certified tax return needs a CPA registered with the Ministry of Finance as a tax agent.
Official sources
- Company Act (公司法, last amended December 26, 2025), Art. 20, Art. 110, Art. 228, Art. 229, Art. 230, Art. 372, Art. 377
- Ministry of Economic Affairs notice 經商字第10702425340號 of November 8, 2018, 「公司法第二十條第二項之公司資本額一定數額及一定規模」 (effective January 1, 2019), GCIS regulations database
- Business Entity Accounting Act (商業會計法, last amended June 18, 2014), Art. 2, Art. 6, Art. 7, Art. 8, Art. 38, Art. 65, Art. 66, Art. 68
- Income Tax Act (所得稅法, last amended September 11, 2026), Art. 23, Art. 39, Art. 41, Art. 102
- Enforcement Rules of the Income Tax Act (last amended February 21, 2022), Art. 49
- Ministry of Finance, 營利事業委託會計師查核簽證申報所得稅辦法 (last amended December 30, 2005), Art. 3, Art. 4
- National Taxation Bureau of Taipei, deadline for CPA certification reports for tax year 2025 (June 8, 2026)
- Official English titles of the statutes checked at law.moj.gov.tw/ENG
Checked: October 6, 2026
Frequently Asked Questions
- Our Taiwan subsidiary has only NT$5 million of paid-in capital. Can it still need a CPA audit?
- Yes. Under the Ministry of Economic Affairs notice of November 8, 2018, a company with paid-in capital below NT$30 million at the end of the reporting period must still have its financial statements audited if its net operating revenue reaches NT$100 million or 100 of its employees are enrolled in Labor Insurance. The rule has applied since fiscal 2019. Public companies follow the securities regulator's rules where it has made its own.
- If our financial statements are audited, must the income tax return also be CPA-certified?
- Not automatically. The tax test sits in a separate Ministry of Finance regulation. Apart from financial institutions, public companies and a few other groups, a business must file a CPA-certified return once its net operating revenue plus non-operating income for the year reaches NT$100 million. Paid-in capital and headcount play no part in that test.
- Can the Taiwan books be kept in US dollars and English?
- Article 7 of the Business Entity Accounting Act makes the New Taiwan dollar the recording currency. A business that keeps foreign-currency books for genuine business needs must still convert them into New Taiwan dollars in its year-end statements. Article 8 requires entries in Chinese, with Arabic numerals for figures; English may be added or used alongside where needed, but the Chinese text prevails.
This article provides general information and is not legal advice on any individual matter.
