Taiwan is one of the most cited examples of modern mountain building in an oblique arc–continent collision. However, the recognition and significance of the Taiwan remnant ocean basin in the final stages of the collision of Luzon with the Chinese margin have long been ignored. This paper emphasizes the Taiwan remnant ocean basin as the main sink for sediments from the uplifted Taiwan suture zone and as a record of clues to the suturing history of the Taiwan collision zone. A part of the palaeo South China Sea has been closed by oblique collision of the Luzon Arc with the Chinese margin in the Taiwan region since about 4 Ma. As collision continued southward along the Taiwan–Luzon convergent zone the remaining South China Sea off SW Taiwan became the Taiwan remnant ocean basin. Beginning about 1.6 Ma much sediment from the longitudinal drainage of the Taiwan orogen was fed into this remaining basin and trapped in the intra-slope basins of the Kaoping slope, with some sediment bypassing via the Kaoping Canyon to the lower reach of the Penghu Canyon. This basin is characteristic of an axial canyon–deep-sea channel–oceanic trench system without significant sediment accumulation in submarine fans. Excess sediments from the Penghu Canyon mainly spill over out of the closing basin to the South China Sea and Manila Trench via the deep-sea Penghu Channel. The Taiwan–Luzon convergent zone continues along the NE South China Sea where the Taiwan remnant ocean basin exists. The implication of the convergence is that the Taiwan remnant ocean basin will keep shrinking in the next few million years southward to the northern end of the Manila Trench at around 20°N, where collision is replaced by subduction. The remnant ocean basin would be closed and deformed, and sediments would be accreted to uplifted collisional terranes north of the Manila Trench.