XinBiDe wrote:OK I think i understand
I thought you meant 14% of 20% meaning:
14/100 X 20/100 = 2.8% total back or whatever it is
No, no, no. Ok...let's go to Fantasy Island for a moment.
Let's say that you begin working on January 1st 2009. You will be withheld at 20% tax for the first 183 days. That takes you to July 2nd or 3rd depending on whether or not it's a leap year for February. ok?
Then for the remaining days of the year, let's say July 4th through December 31st you'll be withheld at 10%.
Now let's do some math.
From January 1st through July 3rd you earn $500,000 NTD gross. You get to keep $400,000 NTD and $100,00 NTD gets withheld for your taxes. (20% withholding)
From January 4th through December 31st you earn $500,000 NTD gross. You get to keep $450,000 NTD and $50,000 NTD gets withheld for your taxes. (10% withholding)
So, when it comes time to do your taxes around April/May of 2010 this is how it would look.*****
You had a total income of $1,000,000 NTD.
You had a total $150,000 NTD withheld from you for your taxes.
Your meager income of $1,000,000 NTD keeps you in the 6% taxable income bracket. So, 6% of $1,000,000 is $60,000. However, you had a total withholding of $150,000, so the difference between the two is your refund. You will be refunded $90,000 NTD and the amount of tax the government will keep is $60,000 NTD.
HOWEVER. If you were to work from January 1st through June 30th and leave Taiwan on July 1st (before the 183 day mark), you will get none of the 20% withheld back! So, basically you would forfeit $100,000 NTD and there's not a damned thing you could do about it! Be aware of the 183 day mark!
ADDITIONALLY. If you arrive in Taiwan on July 4th and start working, you'll be withheld at 20% and you won't get one NTD refunded because you won't have been in Taiwan for 183 days or more in the tax year in question. This happened to me when I first came to Taiwan. I arrived on August 5 and started working and had the mandatory 20% withheld for taxes and I got exactly 0% of the $90,000 NTD withheld!
GRATUITOUSLY. If you arrive in Taiwan on June 21st and you work until December 31st, you beat the 183 rule and get your tax refund minus what taxes you actually owe right? Wrong. Don't you remember? It's because you decided to take that 14 day vacation to your home country to celebrate Christmas which drops you under the 183 day rule for the tax year in question. June 21st ~ December 31st = 195 days - 14 days vacation = 181 days within the tax year = no refund!
I've seen it happen! ******
Remember, this is just fantasy. I know we didn't do the standard deductions, or itemized deductions, or medical deductions, etc. This is just for simplicity sake.