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What withholding tax shall I withhold when paying a salary to employees and rent to the landlord?
1. Amount pay to foreign employees
If you're an employer, you are required to withhold your foreign employee's income tax from his/her paycheck and pays it to the Taiwan tax administrative in his/her name for the first six months in a tax year.
Unlike a Taiwan citizen, a foreign employee who stays in Taiwan under 183 days within a calendar year(January 1 ~ December 31) your Taiwan company are required to withhold 18% of his/her salary no matter how much he makes and the tax withheld shall be paid to the tax authority within the 10th day of salary payment.
When your employee gets ARC(Alien Residence Certificate, the status of the foreign employee will be deemed as tax residence of Taiwan, the employer is not required to withhold 18% of the foreign employee's salary. However, if the foreign employee is not able to stay in Taiwan for more than 183 days in a calendar year and not file and pay his/her income tax, it is the employer's responsibility to pay your employee's income tax. So we would suggest the company employer always withhold and pay 18% of your foreign employee's income tax until the foreign employee has stayed in Taiwan for more than 183 days.
18% of the withholding tax is a kind of prepaid income tax. The tax authority will return the tax when the employee files his income tax next and his tax liability is lower than the withholding tax.
2. Amount pay to an individual landlord
When your company rents office space from a company, every month the landlord should issue your company a uniform invoice so your company can claim the rent as the company's expense. But if your landlord is a person, your company should withhold 10% of income tax from the paycheck and pays to the Taiwan tax authority.
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