The Ministry of Finance and the State Administration of Taxation for Taiwan has declared Taiwanese airlines engaged in flights across the Taiwan Strait exempt from business tax and corporate income tax on income derived from China.
The exemption applies retrospectively to taxes paid by Taiwanese airlines on income since June 25 2009. Previously paid taxes will either be deducted from further taxes or will simply be refunded.
Eligible airlines include any airline registered in the Taiwan region; engaged in cross-strait air cargo, passenger and post transport; and licensed by the Civil Aviation Administration of China or empowered under the Cross-Strait Air Transport Agreement and Cross-Strait Air Transport Supplement Agreement.
However, the tax exemptions apply only to freight or other income derived from China from direct chartered flights between Taiwan and China.