FAQs for Taiwan Tax
Individual Income Tax(8)
What is salary and wages Income ?
Salary and wages mean all income received for services rendered or work performed, including salaries, remunerations, wages, allowances, annuities, endowments, bonuses, retirement payments, pensions and/or any other similar subsidies or compensations. But non-ROC residents staying in the ROC for less then 90 days within a taxable year, whose remunerations were derived from employers outside the ROC, are exempt from the above mentioned.
When is tax payment due ?
Who are considered to be practitioners of profession?
What would happen if a foreigner does not file income tax?
When are foreigners required to file their income tax returns in Taiwan?
How shall R.O.C. residents and non-R.O.C. residents file their annual income tax returns?
What are the withholding tax rates for “non-residents of the R.O.C.” ?
If an ROC citizen is married to an alien, where should they file income tax returns?
If they choose to file a joint return (no matter whether the alien is resident or non-resident) and choose the ROC citizen to be the taxpayer, they can file their income tax returns with the tax authorities located in the district where they live, or they may file at the Foreign Taxpayers Office of the National Tax Administration if they choose the alien to be the taxpayer. However, no matter where they file tax returns, their income should be filed jointly.
How to deduct and declare the business tax if the enterprise has lost the purchasing Uniform Invoice?
If an enterprise has lost deduction copy or reception copy the GUI, either a photocopy of the duplicate stub stamped by the original seller or a photocopy of the lost GUI stamped by the own enterprise can be used as purchase proof for the tax or accounting purposes.
In Taiwan there is the lottery receipt system and I would like to know can I check my company's uniform receipts.
The lottery receipt system is a policy that encourages the end customers to get the uniform invoice after shopping. Every two month, people who have the uniform invoice can check the uniform invoice number online to see if they won the lottery. If you pay by cash, the store issue you a uniform invoice. If you pay by " EasyCard," the store issue you electrical uniform invoice. You can register your " EasyCard " online, so when you win the lottery, you will receive a notice from “EasyCard” system.
Check the below link:
However, if you ask the store to type your company's tax id on the uniform invoice, you lost the opportunity to participate the lottery receipt system. Because all receipts and uniform invoices for business and organization are tax deductible, the government does not need to encourage the business to get the uniform invoice. Since the uniform invoices are with your company's tax id, they cannot participate the lottery receipt system.
What to do if my customer ask to return the goods after the issuance of uniform invoices?
(1) Where the sales amount for the issued uniform invoice has not yet been declared, business entities shall retrieve the receipt and deduction copies of the original invoice and attach them onto the retention copy of the same invoice with the word “nullified” added. Where the original uniform invoice contains the name and uniform serial number of the purchaser, purchaser’s certificate of sales return, purchase return or allowances on purchased merchandise may suffice.
(2) Where the sales amount for the issued uniform invoice has been declared, purchaser's certificate of sales return, purchase return or allowances on purchased merchandise is required; such a case however shall be limited to instances where the original uniform invoices contain the name and uniform serial number of the purchaser.
(1) Where the sales amount for the issued uniform invoice has not yet been declared, business entities shall retrieve the receipt copy of the original invoice and attach it onto the retention copy of the same invoice with the word “nullified” added.
(2) Where the sales amount for the issued uniform invoice has been declared, business entities shall obtain the purchaser's certificate of sales return, purchase return or allowances on purchased merchandise, and shall in addition thereto, retrieve the receipt copy of the original uniform invoice issued. Where the retrieval of the receipt copy is not possible, a copy of said receipt copy may be used in replacement. In the event that both parties have established a sale and purchase agreement and where the original uniform invoice contains the name and address of the purchaser, the retrieval of the receipt copy of the original uniform invoice is not necessary.
The certificate of sales return, purchase return or allowances on purchased merchandise set forth in the preceding paragraph shall contain four copies of a same form, with the first and second copies for use by the business entity selling the goods or services as output tax deduction declaration and accounting voucher respectively, and the third and fourth copies for use by the purchaser as input tax deduction declaration and accounting voucher respectively.
If a business fail to declare the deduction of VAT at the period the transaction heppend, can it declare next period? What is the limitation period to declare VAT deduction?
Input VAT is the tax that you pay on purchase transactions. Output VAT is the tax that your customer pays on sales transactions. The amount of VAT payable or overpaid by a company is the difference between the output tax in a tax period and the input tax in the same period. A company, whether or not it has sales, shall file a bimonthly tax return on its sales amount and tax payable or overpaid of the preceding two months together with the competent tax authority prior to the fifteenth day of the following period.
Requirements to qualified for zero tax rate in VAT for services related to export or services provided in Taiwan and used abroad
The Tax Authority pointed out that two requirements to qualified applied for zero tax rate in VAT filing
- Services provided in Taiwan and used aboard: the service provider must be in Taiwan, and the place of use is outside Taiwan
Provide the related documents: approval of payment received, inward remittance, foreign exchange. In case, the tax authority may ask you to provide the email, contract related to the transaction.
It has often been found that some business has mistakenly declared their taxable sales at zero-rated sales, resulting in a tax penalty.
The Tax Authority exemplifies a real case that AAA company in Taiwan provide marketing and agent service for foreign companies to sells goods in Taiwan.
Foreign companies remit commission monthly abroad to AA company if AA companies achieve the sales goals. However, AA Company mistakenly declared the monthly foreign remittance aboard as zero tax rate in VAT. AA company was later found and punished by the tax authority. The brokerage activities is provided in Taiwan and, so it is not applicable to the zero tax rate in VAT.
Input tax from buying a vechile under nine seats shall not declare for VAT deduction
Company Income Tax(4)
What is the definition of the term “fixed place of business” used in the Income Tax Act?
The term "fixed place of business" as used in this Act refers to fixed places for the operation of business, including administrative offices, branch or sub-branch offices, business offices, factories, workshops, warehouses, mining fields, and construction sites; however, this shall exclude warehouse or storage sites used exclusively for the purchase of goods and maintenance shops not used for processing or manufacturing products.
How can one calculate the taxable income if a foreign company engage in international transport, construction contracting, providing technical services , or machinery and equipment leasing, etc. and receive remuneration from a Taiwanese enterprise?
A foreign company with its head office outside Taiwan, and which is engaged in international transport, construction contracting, providing technical services, or machinery and equipment leasing, etc. in the territory of the R.O.C., and the cost and expenses of which are difficult to calculate may apply for approval to consider 10% of its total business revenue, in the case of an enterprise engaged in international transport business, or 15% of its total business revenue, in the case of an enterprise engaged in the other businesses, as its income derived within the territory of Taiwan. regardless whether or not it has a branch office or business agent in the territory of Taiwan.
What is the income from sources in the Republic of China in accordance with Income Tax Act？
If a company not have a fixed place of business or any business agent in Taiwan, how does it pay taxes？
In case a company has no permanent establishment or business agent within the territory of Taiwan, in the event of having income within Taiwan as provided in Article 88, the tax withholder shall withhold the income tax payable in accordance with prescribed withholding rates; in case the taxpayer has income which does not fall within the withholding scope as provided in Article 88, the tax agent shall be responsible for calculating and compiling his or her annual income into related profit and loss categories and levying relevant tax rates on them respectively, in accordance with regulations, during the tax return filing period from May 1 to May 31 every year. (Article 73 of the Income Tax Act)
What company information is publicly available?
A: Taiwan Company Registry Website only reveals the following information:
Company Name, Amount of Capital, Name of directors, Location of Company, Date of Registration, Business Scopes.
The shareholder list, annual report, and articles of incorporation are private and cannot be found in Taiwan Company Registry Website or any other website.
Please check the following link:
When is the due date to remittance the capital once I get the investment approval from MOEA?
The effective time for capital transfer after the investment approval is one year. After one year, the investment approval is invalid, you have to apply for the investment approval again.
What are the power and resposiblities of the responsible person of a representive office?
The responsible person’s powers and responsibilities:
The Company Act does not clearly define the powers of a responsible person. However, it is clear that a responsible person is authorized to perform all acts regarding the general administration of the branch office according to the head office’s aims and objectives. This may include:
- Conserving the branch office’s assets;
- Executing powers of attorney on the company’s behalf;
- Authorizing legal representation of and litigation by the company;
- And executing any legal transactions that are within the nature and scope of that company’s business.
The responsible person’s chop is required on numerous company documents and is regarded as a signature. In this sense, the responsible person plays a very important role in the branch office daily operations. Consequently, any person in possession of the legal representative’s chop may exercise their power to bind the company. In order to prevent unauthorized use, branch office should restrict access to the responsible person’s chop by keeping records of who used the chop, at what time, and for what purpose.
The responsible person is liable for failure by the company to make required filings by Company Act.
The responsible person may be personally liable for wrongful or fraudulent trading in the context of insolvency of the company;
The responsible person has responsibilities under Labor Law.
The responsible person can be liable for any tax due that the branch office is unable to pay not pay.
The responsible person can be liable if the financial statement is fraud, misrepresentations and Insufficient record keeping
The responsible person may be subject to fines and penalties accrued by the company.
Company Act Article 380
· A foreign company which cancels or nullifies all of its branch offices in the Territory of the Republic of China shall complete liquidation of its business within the territory of the Republic of China or right and obligation incurred by its branch offices. Any outstanding obligation shall still be discharged by such foreign company.
The aforesaid liquidation shall be undertaken, unless a liquidator is otherwise designated by the foreign company, by the responsible person of the foreign company within the territory of the Republic of China or the managerial officer of its branch office. The provisions of this Act pertaining to the process of liquidation applicable to different classes of companies shall apply mutatis mutandis to such foreign companies according to their respective nature.
· The property of a foreign company within the territory of the Republic of China shall not be moved out of the territory of the Republic of China during the time of liquidation and shall not be disposed of except by the liquidator in the execution of the liquidation.
· The responsible person, managerial officer of its branch office or the designated liquidator of a foreign company within the territory of the Republic of China who acts in contravention of the provisions of the two preceding articles shall be jointly liable with such foreign company in respect of the transactions done within the territory of the Republic of China or obligation contracted by its branch office.