May Tax Season Approaches: Ministry of Economic Affairs Urges SMEs to Seize 3 Major Tax Incentives
The Ministry of Economic Affairs is encouraging small and medium-sized enterprises (SMEs) to take advantage of three significant tax incentives during the upcoming May tax season. These include tax credits for R&D expenditures, a 200% income deduction for hiring at least two entry-level employees aged 24 or younger or 65 or older, and a 175% income deduction for increasing wages for entry-level staff. These measures aim to reduce tax burdens and promote R&D, employment, and wage growth.
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- 📰 Published: April 10, 2026 at 18:16
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The Ministry of Economic Affairs today issued a press release stating that, according to the "Small and Medium Enterprise Development Act," if enterprises invest in R&D-related expenditures in fiscal year 114, including salaries for R&D personnel, education and training expenses, as well as consumable materials, raw materials, samples, databases, and software, they can choose to deduct 15% of the expenditure from the current year's income tax payable, or deduct 10% over three years.
For example, if an enterprise invests NT$10 million in R&D throughout the year and chooses to deduct it in the current year, it can reduce its tax liability by up to NT$1.5 million.
Regarding employment promotion, the Ministry of Economic Affairs stated that if SMEs hire at least two entry-level employees aged 24 or younger or 65 or older in fiscal year 114, the related salary expenses can enjoy a 200% income deduction for profit-seeking enterprises when filing taxes in May this year, which helps reduce taxable income and tax burden.
In addition, to encourage enterprises to increase wages for entry-level employees, the Ministry of Economic Affairs pointed out that if enterprises raise wages for entry-level employees in fiscal year 114, the related salary expenses can enjoy a 175% income deduction. Taking an example of an enterprise increasing the monthly salary of 10 employees by NT$5,000, the annual additional expenditure is NT$600,000. In addition to being fully reported, an additional NT$450,000 (75%) can be deducted; based on a corporate income tax rate of 20%, this can reduce the tax burden by approximately NT$90,000.
The Ministry of Economic Affairs further explained that to reflect wage growth trends, the scope of applicable entry-level employees will be adjusted annually based on the Ministry of Labor's "Occupational Wage Survey" results. For example, for the tax filing standard applicable this year, full-time entry-level employees in fiscal year 114 are those with an average monthly regular salary of less than NT$63,000; part-time employees are identified by a daily wage not exceeding NT$3,152 or an hourly wage not exceeding NT$394.
The Ministry of Economic Affairs reminds that there is only about one month left until the deadline for filing corporate income tax returns. Eligible SMEs should prepare relevant documents as soon as possible to apply, so as not to miss out on tax incentives. (Edited by Yang Lan-hsuan) 1150410
For example, if an enterprise invests NT$10 million in R&D throughout the year and chooses to deduct it in the current year, it can reduce its tax liability by up to NT$1.5 million.
Regarding employment promotion, the Ministry of Economic Affairs stated that if SMEs hire at least two entry-level employees aged 24 or younger or 65 or older in fiscal year 114, the related salary expenses can enjoy a 200% income deduction for profit-seeking enterprises when filing taxes in May this year, which helps reduce taxable income and tax burden.
In addition, to encourage enterprises to increase wages for entry-level employees, the Ministry of Economic Affairs pointed out that if enterprises raise wages for entry-level employees in fiscal year 114, the related salary expenses can enjoy a 175% income deduction. Taking an example of an enterprise increasing the monthly salary of 10 employees by NT$5,000, the annual additional expenditure is NT$600,000. In addition to being fully reported, an additional NT$450,000 (75%) can be deducted; based on a corporate income tax rate of 20%, this can reduce the tax burden by approximately NT$90,000.
The Ministry of Economic Affairs further explained that to reflect wage growth trends, the scope of applicable entry-level employees will be adjusted annually based on the Ministry of Labor's "Occupational Wage Survey" results. For example, for the tax filing standard applicable this year, full-time entry-level employees in fiscal year 114 are those with an average monthly regular salary of less than NT$63,000; part-time employees are identified by a daily wage not exceeding NT$3,152 or an hourly wage not exceeding NT$394.
The Ministry of Economic Affairs reminds that there is only about one month left until the deadline for filing corporate income tax returns. Eligible SMEs should prepare relevant documents as soon as possible to apply, so as not to miss out on tax incentives. (Edited by Yang Lan-hsuan) 1150410