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Tax question

ROC taxes, overseas payment of taxes, withholding rates, general tax liability issues, and other tax-related matters
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Tax question

Postby Wind666 » 03 Apr 2012, 17:23

Hi,

I'm new here, need some advice.

Let say, I earn 100k per month. What will my tax rate be if I stay less the 183days in Taiwan? Anyway to reduce the tax rate?
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Re: Tax question

Postby milkalex » 03 Apr 2012, 17:25

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Re: Tax question

Postby Wind666 » 03 Apr 2012, 17:31

So if I stay less then 183 days, my tax will be 18% and if I stay for 1 whole year my tax will be at 20%. Am I right?
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Re: Tax question

Postby milkalex » 03 Apr 2012, 17:42

no you're not. It is 18%, after 6 month it will go down to 12% for the rest of the year. The year after everything begins with 18% and then 12% after 6 month and so on and so on.... every March (or so) of the next year you can apply for a tax refund which will be paid out in November
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Re: Tax question

Postby Wind666 » 04 Apr 2012, 09:19

But if my annual income is more then 1million NT, my tax rate is 20% isn't it?
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Re: Tax question

Postby nonredneck » 14 May 2012, 22:52

See
http://www.pwc.com/en_tw/tw/publication ... k-2011.pdf

I think you are thinking of page 34. Reference the table. The 20% you are referring to is a progressive tax (similar to the US tax system if you are familiar with that). The amount between 1,130,001 and 2,260,000 NTD is taxed at 20%. Below 1,130,001 it is taxed at a lower rate.

If you are thinking of the AMT, see page 45. I can't cut and paste it (**** adobe reader) but it looks like $6 million NT is the threshold at which the AMT might take effect.
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Re: Tax question

Postby Abacus » 15 May 2012, 09:48

If your income was 1,076,000 then you would pay the following taxes.

76,000 - tax free deduction (edit - an additional 82,000 deduction I think)
500,000 - taxed at 5%
the next 500,000 taxed at 12%

Your effective tax rate would be about 8% overall which is much less than the 18% if you stayed less than 183 days
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Re: Tax question

Postby Rotalsnart » 15 May 2012, 10:42

I think it would be helpful for the OP, and other people who are trying to become familiar with Taiwan's personal income tax system, to keep in mind the distinction between "tax withholding rate" and "tax rate." The tax withholding rate determines how much tax the employer withholds from each paycheck in anticipation of tax owed. This withholding rate is determined in advance, and varies depending on factors such as local or foreign nationality and period of residence (there are already lots of threads on this). The tax rate, on the other hand, is the actual rate of tax that applies when the taxpayer files their taxes, and is determined based on how much income the taxpayer has actually earned in the taxable period (which determines what tax bracket the tax payer falls into). A taxpayer who has worked for a year and had tax withheld regularly at a 20 percent withholding rate is likely to get a refund at the end of the year, because their actual tax rate is likely to be lower than the rate at which income has been withheld from their pay (unless the taxpayer falls into a very high income bracket).

A taxpayer may also be able to pay less tax -- i.e. claim a greater refund at the end of the tax period -- by claiming various deductions and exemptions available under Taiwan's tax laws at the time they file their tax.

By the way, I'm not an accountant -- I'm just trying to clarify some very basic concepts that new posters often seem to get muddled.
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