student ARC and taxes

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

Postby bhavana » 10 Apr 2007, 12:02

I'm in what seems to be a rather peculiar and unclear tax and visa situation. I have an ARC based on my status as a graduate student, and I receive a small amount of pay from a publisher in Taiwan for whom I perform services on a freelance basis. The publisher deducts 20% in taxes from my pay, and sends me a receipt which I'm supposed to sign and return. The only relevent information I've received from my employer so far is: "foreingers without an I.D. number 統一證號 are taxed 10% or 20% of their income (10% for payment over 20,000 and 20% for over 10,000)."

My question are:
1) Am I working illegally, and if so, how can I avoid running into any trouble or jeopardizing my student status and scholarship?
2) My employer needs a tax number for me, either my passport number or my ARC number (they say it's up to me). Which one should I give them?
3) Along with each invoice, my employer sends a receipt which I am supposed to sign and return to them. Should I do as they ask?
4) I've already been here for several years, most recently with a multiple-entry visa. Shouldn't I have around 6% of my pay withheld (as in the past) rather than 20%?
5) Apart from my scholarship, my official income is very low. Should I apply for a tax refund, and will the full amount be refunded? Or would applying for a refund just draw unwanted attention to my grey income and status?
6) Could I just fill our a few papers and get formal permission to do a little freelancing while retaining my student status?

Many thanks for your words of wisdom!
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Re: student ARC and taxes

Postby jlick » 11 Apr 2007, 12:29

bhavana wrote:1) Am I working illegally, and if so, how can I avoid running into any trouble or jeopardizing my student status and scholarship?


Yes, you are working illegally. Traditionally the tax office has not been interested in enforcing work rules, however the immigration agency has recently started asking for tax certificates for ARC renewals or APRC applications in some cases, and questioning unusual income sources.

2) My employer needs a tax number for me, either my passport number or my ARC number (they say it's up to me). Which one should I give them?


The tax office can look up one when given the other, so it probably doesn't matter.

4) I've already been here for several years, most recently with a multiple-entry visa. Shouldn't I have around 6% of my pay withheld (as in the past) rather than 20%?


The tax code determines residency based on total time in the country for ANY reason, so time on a multiple entry visa would help qualify as a resident. Many employers are not aware of that. However, if your income is not 'salary' but is classified, for example, as a 'professional service' or some other type of income, then the withholding will vary from 10-20%. You would want to look at the 'Category of Income' on the withholding tax statement filed by the employer to see what category of income they use. You can consult the withholding desk at the tax office they use to determine if the correct category is used.

6) Could I just fill our a few papers and get formal permission to do a little freelancing while retaining my student status?


Those on student ARCs are eligible to work part time if they obtain a permit to do so. Please consult your school on procedures to apply.
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