Taiwan is located at the boundary between the Eurasia plate and Philippines sea plate, where active plate motion leads to significant annual displacements of geodetic control points up to 4-5 cm. For the purpose of maintaining the existing Taiwan Geodetic Datum 1997 (TWD97) horizontal coordinate system which is connected to the International Terrestrial Reference Frame (ITRF), this research aims at predicting the yearly displacements of thousands of control points of various orders by establishing a horizontal velocity model of Taiwan. This velocity model is composed of two groups of physical parameters which characterize the regional block motions and the residual systematic signals, respectively. We used GPS-derived velocity observations collected at 472 points from 1993 to 2005 and the Least-squares Collocation (LSC) technique to create this model. And for validating the model, we further adopted 16 evenly distribute continuous GPS tracking stations as external check points. In stable regions, the accuracy of validation is ±m 5.633 mm/year. The results show that the developed model is capable of providing accurate estimates of annual displacements of geodetic control points in Taiwan.