JFRV for 5 years... Why am I being taxed 18%?

ROC taxes, overseas payment of taxes, withholding rates, general tax liability issues, and other tax-related matters
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Re: JFRV for 5 years... Why am I being taxed 18%?

Postby maowang » 23 Feb 2012, 16:40

Do we work at the same place?

From what the tax office sent another coworker, and from what I can gather, the provision was written for ARC holders without APRC or JFRV holders in mind. The rule never specified the difference and therefore ALL foreigners are subject to the employer's discretion regardless of residency. AT the same time the tax office confirmed that domiciled foreigners should be taxed 5%. It is a huge cock up that left a loop hole for employers to exploit.

My suspicions are that the employer is having cash flow problems and may be using the withholding for added liquidity. Just a hunch.
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Re: JFRV for 5 years... Why am I being taxed 18%?

Postby maowang » 23 Feb 2012, 17:21

It seems like a provision that is being used to skirt Article 26 of the Labor Standards Act. This is how my employer intends to use it.

Article 26 An employer shall not make advance deduction of wages as penalty for breach of contract or as indemnity.
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Re: JFRV for 5 years... Why am I being taxed 18%?

Postby Kawa » 23 Feb 2012, 19:11

It's been my first year of work in Taiwan, and my employer also withheld 18% the first 6 months of 2011 and 6% for the rest, which makes a 12% annual average.

However, I found this in the Income Tax Act:

"The tax brackets and rates of consolidated income tax are as follows:
1. If the annual total net consolidated income is less than or equal to NT$ 500,000, the tax rate shall be 5%.
2. If the annual total net consolidated income is above NT$ 500,000 to NT$ 1,090,000, the income tax payable shall be NT$ 25,000 plus 12% for the portion of income more than NT$ 500,000.
3. If the annual total net consolidated income is above NT$ 1,090,000 to NT$ 2,180,000, the income tax payable shall be NT$ 95,800 plus 20% for the portion of income more than NT$ 1,090,000.
4. If the annual total net consolidated income is above NT$ 2,180,000 to NT$ 4,090,000, the income tax payable shall be NT$313,800 plus 30% for the portion of income more than NT$ 2,180,000.
5. If the annual total net consolidated income is above NT$ 4,090,000, the income tax payable shall be NT$ 886,800 plus 40% for the portion of income more than NT$ 4,090,000."

Is this applicable to everybody or only Taiwanese citizens? If yes in my case that would mean a huge refund in May :cool:
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Re: JFRV for 5 years... Why am I being taxed 18%?

Postby Okami » 23 Feb 2012, 19:17

I think Maowang's problem is that he'd like the money now because he actually has a family. Nothing worse than not having enough money when you have kids. There also seem to be some issues with his place of employment.
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Re: JFRV for 5 years... Why am I being taxed 18%?

Postby Charlie Phillips » 23 Feb 2012, 19:32

Kawa wrote:It's been my first year of work in Taiwan, and my employer also withheld 18% the first 6 months of 2011 and 6% for the rest, which makes a 12% annual average.

However, I found this in the Income Tax Act:

"The tax brackets and rates of consolidated income tax are as follows:
1. If the annual total net consolidated income is less than or equal to NT$ 500,000, the tax rate shall be 5%.
2. If the annual total net consolidated income is above NT$ 500,000 to NT$ 1,090,000, the income tax payable shall be NT$ 25,000 plus 12% for the portion of income more than NT$ 500,000.
3. If the annual total net consolidated income is above NT$ 1,090,000 to NT$ 2,180,000, the income tax payable shall be NT$ 95,800 plus 20% for the portion of income more than NT$ 1,090,000.
4. If the annual total net consolidated income is above NT$ 2,180,000 to NT$ 4,090,000, the income tax payable shall be NT$313,800 plus 30% for the portion of income more than NT$ 2,180,000.
5. If the annual total net consolidated income is above NT$ 4,090,000, the income tax payable shall be NT$ 886,800 plus 40% for the portion of income more than NT$ 4,090,000."

Is this applicable to everybody or only Taiwanese citizens? If yes in my case that would mean a huge refund in May :cool:


You may file your taxes in May but you'll have to wait about 6 months for your refund.
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Re: JFRV for 5 years... Why am I being taxed 18%?

Postby stare » 24 Feb 2012, 10:41

A question I have still remains unanswered.

If I leave before the 183 days is up, is my employer responsible for the unpaid tax.

For example:
A teacher works for 5 months and pays 6% tax on his income. When, according to what I understand, he should be paying 18%. There is now 12% of unpaid taxes. Is the school now responsible for paying this 12% of tax?

If they are, then why?

Wouldn't your income be calculated over the year? As opposed to just part of the year? Is there any way to find out if your employer is responsible for this unpaid portion.
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Re: JFRV for 5 years... Why am I being taxed 18%?

Postby Kawa » 24 Feb 2012, 14:04

Charlie Phillips wrote:You may file your taxes in May but you'll have to wait about 6 months for your refund.


As long as it's coming back into my pocket... :D
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Re: JFRV for 5 years... Why am I being taxed 18%?

Postby Satellite TV » 07 Mar 2012, 10:10

maowang wrote:That would be fine... If I wasn't supporting a family. I have two citizen dependents right now. Diapers alone get pretty pricy... if the washing machine died or the car had problems then I'd be in deep. Bills are monthly. If I have anything extra I usually put it in a mutual fund that I already have set aside. Now, I may have to sell funds.


Well you could save a lot of money by using washable nappies instead of throw away diapers.
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Re: JFRV for 5 years... Why am I being taxed 18%?

Postby hetbellz » 28 Jun 2012, 17:46

Accountant: " If we don't tax you 18% for the first six months, the company will get a fine !"

Hetbellz: " Really? Because I just took a look a the Tax Act and ..."

Accountant : " Our lawyer will give you a call."

Hetbellz: :notworthy:
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