I am so confused - Taiwan Taxes

[misterpoh]

Dear forum members,

I am a "numbers" idiot and have done the mistake by reading too much online and have completely confused myself.

I am hoping some experts can assist where possible.

I have been offered a role in Taiwan with a base pay of AUD$75K + AUD$12K living allowance + AUD$XXX bonus if i meet targets.

I am moving to Taiwan in June and will be residing there on a permanent basis.

Questions:

1. What is my total take home income after taxes? I have seen on a few websites noting that a certain amount is not taxable etc.
2. My employers says they are required to 'withhold' the tax component from my salary and i wont have to worry about paying it myself. True?
3. The contract says that I may be liable to contribute to the national health insurance scheme and labor insurance scheme. True? I will be getting full private health insurance from my company.
4. There are many sites in Australia that features an online tax calculator. Do you know of one for Taiwan?
5. Does Taiwan have a compulsory superannuation or will I need to contribute myself?

SOrry for the often asked questions, I have done lots of reading and still dont understand..

Thank you in advance!

[dnwolfgang]

"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."

If you make 100K AUD ~= 3M Taiwan Dollar, that's 313800 + 820000*.3 == 559800 NT or 18850 AUD

And you will have to pay the national health insurance, 2K NT / mo (I think that's the cap)

[tommy525]

Great info above !

Meantime also important to note that you must be physically present in taiwan (for whatever reason) at least 183 days of the calendar year to get the local tax rate (and avoid paying a flat 20pct) and to avail yourself of the exemptions and deductions .

Your company is entitled to withhold taxes from you each month at 20pct , until 183 days have passed of each calendar year. They are liable for any shortfall on those taxes if you leave before staying at least 183 days of the year.

[the bear]

Those rates are old no? It's 18% not 20%.

[misterpoh]

Thank you forum seniors for the reply.

I am excited yet a little scared of whats to come. I am sure Taiwan will represent a great vibrant lifestyle.

Just to clarify,

1. I am liable to pay for the labor insurance etc even if I have full medical coverage via a private provider?
2. Superannuation requirements?
3. Is the living allowance component taxable @ the same full tax bracket?
4. Since my company is going to be withhold the required taxes, does this mean that I wont have to pay more during tax time and the Taiwanese authorities will bill my company instead?
5. In Australia, we have ways to suppress the tax margins with negative gearing etc. Will I be entitled to offset my taxable income with living allowances etc? How can I pay less taxes while working in Taiwan?

I am moving to Taipei in June and will be based there for as long as I serve my contract.
I briefly understand the 183 day rule; such as if I am there for under that period, I am to pay 18% of my total received income. If I am to exceed the 183 days, I am taxed as a local resident.

Please kindly advice.

[tommy525]

Unlike the USA, I don't think taiwan taxes living allowance as personal income. But there may be restrictions. For example, best if the company pays for your rent directly , rather then to you, to pay your landlord.

IN the USA, this is treated as personal income regardless.

IF the company gives you a housing allowance (or pays the landlord directly) or a car allowance, its all personal income FAIK.

[misterpoh]

Thanks Tommy,

I read up on the KPMG website that is a company pays directly, its exempted from taxes. But as an individual to pay, from what i can gather is a taxable stream of income..

Not sure if moving to Taiwan is worth the hassle..

[tommy525]

If you believe moving to Taiwan is a hassle and have alternatives, then I say you should NOT do it. It wouldnt be worth it. Its like marriage. You have to be 100pct going in to even have a chance to make it a success.

[misterpoh]

Thanks for the advise Tommy.

Moving to Taiwan is an immediate career progression for me and should allow me to achieve the desired results.

Just so confused with the taxation regulations there.

[tommy525]

Thanks for the advise Tommy.

Moving to Taiwan is an immediate career progression for me and should allow me to achieve the desired results.

Just so confused with the taxation regulations there.

TAiwan is pretty different from OZ. IT will take some getting used to. The taxes are not that hard, much easier then American taxes. And over-all should be much less then in Oz (or the USA).

good luck on your career progression. Hope it all works out for you.