The amended Income Tax Act (Amendment), which stipulates new “see-through” rules on the taxation of Taiwan real estate, has come into effect on 01 July 2021 and retrospectively applied on real estate acquired after 01 January 2016.

Under this Amendment, holding company structure would be disregarded and the sale of the holding company, which directly or indirectly holds Taiwan real estate constituting half of the company‚Äôs value, could be deemed as a sale of the underlying real estate subject to capital gain tax up to 45%. Without this rule, the sale of shares of the holding company may only give rise to a tax up to 20%. Though not exactly the same, the advice and planning techniques on US Foreign Investment in Real Property Tax Act (FIRPTA) could be good reference to future planning.

The new see-through rule applies to income tax only. Although this rule reinforces the preference to hold Taiwan real estate through individual title from income tax perspective, wealth planners should review existing structures and consider various angles for planning in the future, in particular on criminal risk assessment of trustees and insurance companies.

In our new client alert, we also covered the following questions:

  • Can an offshore trustee/insurance policy still hold Taiwan real estate?
  • What are the tax implications for an offshore trustee/insurance policy holding Taiwan real estate?
  • How would the Amendment and CFC together affect estate planning for Taiwan residents?

You can read our full client alert – Adding another wrinkle to controlled foreign company – New legislation impacts offshore trust or insurance structure on InsightPlus.


Peggy Chiu is a Partner at Baker McKenzie's Taipei office. Peggy has considerable experience in assisting and representing clients in banking and finance matters, in particular in fintech and innovation, regulatory compliance, private banking and financing projects.


Michael Wong is a member of the Firm's Global Executive Committee and chair of the Asia Pacific region. He practices in the areas of Mergers & Acquisitions, as well as Corporate Law. He earned his J.D. from the University of California, Hastings and received his LL.M from Soochow University. Mr. Wong was admitted to the California Bar in 1985.


Scott Chang is an Associate at Baker McKenzie's Taipei office. Scott advises and represents both local and international clients on tax related issues and private wealth management matters as well as corporate merger and acquisition transactions.