Paying ROC taxes on non-Taiwan rental property

ROC taxes, overseas payment of taxes, withholding rates, general tax liability issues, and other tax-related matters
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Paying ROC taxes on non-Taiwan rental property

Postby nonredneck » 20 Apr 2011, 22:29

When I move, I plan to convert my current house in the USA to a rental. Do I need to pay ROC taxes on any rental income? I know the US is going to tax me since it's not considered foreign-earned income, but I'm not sure about Taiwan.
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Re: Paying ROC taxes on non-Taiwan rental property

Postby tommy525 » 20 Apr 2011, 23:32

Far as I know the ROC doesnt tax foreign (outside Taiwan) income. UNless that has changed. If Taiwan signs some sort of Tax treaty with the USA.
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Re: Paying ROC taxes on non-Taiwan rental property

Postby Enigma » 22 Apr 2011, 01:02

Not to worry. No tax on foreign income. I specifically asked Mrs Pann at the Banqiao office yesterday. My query was not rental income but social security income that is deposited directly here. Her response was, "Taiwan does not tax income earned abroad."
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Re: Paying ROC taxes on non-Taiwan rental property

Postby tommy525 » 22 Apr 2011, 01:10

Thats what Iv always thought. The only exception may be if they feel you are getting paid a good portion abroad for work actually done in Taiwan. Then they will get curious. But income obviously derived abroad, such as rental income. That is irrefutably income that has nothing to do with you being in Taiwan.
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Re: Paying ROC taxes on non-Taiwan rental property

Postby nonredneck » 27 Apr 2011, 04:51

Thanks. That is what I thought, but I just wanted to make sure.
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Re: Paying ROC taxes on non-Taiwan rental property

Postby ben_gb » 14 May 2011, 14:01

Enigma wrote:Not to worry. No tax on foreign income. I specifically asked Mrs Pann at the Banqiao office yesterday. My query was not rental income but social security income that is deposited directly here. Her response was, "Taiwan does not tax income earned abroad."


I don't think that is right. They introduced a tax on global income law starting from last year (2010). However the allowance is fairly high for overseas income/gains (NT$6 million from my recollection)...though there might be other ways to calculate it if you use the alternative minimum tax scheme.
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Re: Paying ROC taxes on non-Taiwan rental property

Postby nonredneck » 15 May 2011, 05:06

ben_gb,
You might be right. It looks like Taiwan is adopting the same communist leanings as the USA.
I found this tax info

http://www.ntat.gov.tw/county/ntat_ch/n ... 9-04-2.jsp

http://www.ntat.gov.tw/county/ntat_ch/n ... 04-2-4.jsp
Q: Who has the obligation to include his or her overseas income in the amount of basic income?
A: Someone who meets both of the following conditions shall include his or her overseas income in the amount of basic income:
(1) He or she is a resident of the ROC, and
(2) His or her filing unit has aggregated both overseas income greater than or equal to 1 million NT dollars (USD $50,000) and basic income greater than 6 million NT dollars (USD $300,000) in one year

http://www.ntat.gov.tw/county/ntat_ch/n ... 4-2-10.jsp
10. Q: Is a foreign professional working within the territory of the ROC necessarily required to file his or her overseas income?
A: If a foreign professional working within the territory of the ROC resides or stays for a period of more than or equal to 183 days during a taxable year, whereby such person is considered to be a resident of the ROC, he or she shall include his or her overseas income in the amount of basic income in the annual income tax return from 2010 in accordance with the Income Basic Tax Act.
However, under the condition where the income of a foreign professional is being taxed at a marginal rate of more than 20%, and the amount of income basic tax payable is calculated as in Situation 2 of Q8, although he or she has overseas income, the possibility of he or she being required to pay basic tax should be significantly reduced.

I am nowhere near earning USD $50,000 in non-salaried income and there is no way I am going to earn USD $300,000 in a year from my salary and any potential rental income. So legally speaking, I fall within the exemption limits.

But honestly, how is Taiwan going to know if you don't report rental income from a house outside the Taiwan?
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Re: Paying ROC taxes on non-Taiwan rental property

Postby cshu » 28 May 2011, 22:50

Hi,

Taiwan institute this basic income tax scheme (like an alternative minimum tax) to cover those residents who make most of their money from investments abroad. The basic income tax rate is a flat 20% no matter what. Just like AMT, the basic income includes more income sources, such as foreign source income. The reporting obligation kicks in when you have 1 million NT in foreign income. The basic income tax filing is required if total basic income is greater than 6 million NT. However, the taxpayer would pay the higher of the two taxes (regular income or basic income tax). Thus for modest amount of foreign income, the basic income tax would not exceed the regular income tax because the regular income tax rates are higher. Further, any foreign tax paid on the foreign income may be used to offset the basic income tax liability, with some hoops to jump through-- You will need to certify foreign tax paid through a TECO office.

Now, how would they know about your foreign income is a different question.
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Re: Paying ROC taxes on non-Taiwan rental property

Postby jingo445 » 28 Aug 2011, 04:51

Sorry to bump but it seems allowable in this thread.

I read this: "resides or stays for a period of more than or equal to 183 days during a taxable year, whereby such person is considered to be a resident of the ROC" are eligible to be taxed...

The wording is confusing for a case such as mine. I have never been a legal resident to avoid things like this. I do "live" in taiwan 330+ days a year (so I qualify for the USA tax exemption) for some years now. However, I simply take a vacation out of Taiwan whenever the 2 months visa limit hits. Since it says "period" does that mean uninterrupted?

If I interrupt the period by leaving and I am a non-resident legally am I okay? so if it JUST said "resides" I would feel comfortable but it says "or stays". But it also says "whereby such a person is considered to be a resident" and I do not qualify as a resident for legal purposes (or did I automatically qualify despite the flights out and just not know it???) , so just curious if there was a discrepancy between the legal and tax situations.

I do not work in Taiwan (legally or illegally) as my income is all earned abroad, so I didn't think I had to worry about this, since I am not a resident. But that wording has me a bit confused. I do not want to be double taxed, and yes I understand the exemption but I'm worried about the amount above that exemption being double taxed (35% to USA and 20% to Taiwan does not sound tempting to me).

Why did Taiwan start doing this to FOREIGNERS too? Even the notoriously xenophobic, when it comes to politics, Japan doesn't tax foreign non-permanent residents who lived there less than five years on their foreign earned income though permanent residents do get taxed. It'd be silly Taiwan would want to lose foreign businessmen like myself to Japan or Hong Kong (which doesn't tax any non-foreign income).

Also what is the top income tax rate for a Taiwanese citizen? If I have no choice but to pay it, citizenship might be my only option to avoid double taxation. Has anyone heard if you can pay that massive $15 million NT donation for a sort of honorary "citizenship" and negotiate special terms for that citizenship? such as not taxing foreign sourced income similar to Hong Kong.
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Re: Paying ROC taxes on non-Taiwan rental property

Postby nonredneck » 04 Sep 2011, 19:04

I think there is a difference between a legal Permanent resident and being a resident for tax purposes. Those sections pertaining to the tax laws to me mean that they apply to foreigners who meet the requirement for claming a Taiwanese resident tax rates (183 days in a calendar year) and permanent residents.

It doesn't sound appealing.

cshu mentioned that you might be able to deduct your foreign (non-taiwanese) income tax from your Taiwanese income tax for foreign investments. So it sounds like there is a method in place to ease the burden.
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