Viewpoints from Kaizen

If you have not received the tax bill in Taiwan, does that mean you do not have to pay the tax? A reminder to everyone, tax bills are sent via registered mail. If the mail is not collected and the post office retains it, it is still considered delivered under the law even if you did not actually receive it. If you fail to pay within the deadline, you may not only be charged late payment penalties but also face compulsory enforcement procedures. Under the law, there are five methods of service, namely: ordinary service, substituted service, service by deposit (postal retention), service by retention at the premises, and public notice service. Each is described as follows: Type Method Effective Time Ordinary Service Delivered to the recipient’s residence, office, or place of business and handed directly to the person. Code of Civil Procedure § 136 Takes effect upon delivery to […]

Taiwanese individuals who invest in overseas financial products or real estate must file an Alternative Minimum Tax (AMT) return if their total annual foreign-source income exceeds TWD1,000,000 and their basic income surpasses the exemption threshold (TWD 7,500,000 for the 2024 tax year). It is important to note that different types of income, such as capital gains and interest, are categorized seperately and cannot be aggregated for tax calculation purposes.   Taiwan’s comprehensive income is categorized into ten types (1) profit-seeking income, (2) income from professional practice, (3) salary and wage income, (4) interest income, (5) rental and royalty income, (6) income from self-operated farming, fishing, animal husbandry, forestry, and mining, (7) capital gains, (8) prizes or awards from contests, competitions, and games of chanes, (9)retirement income, (10) other income.   For example:   Mr. B filed his Individual Income Tax Return for 2023 and reported foreign-source income of TWD 6,200,000, […]

The current business tax thresholds for sales of goods and services in Taiwan are TWD 80,000 per month for goods and TWD 40,000 per month for services. These thresholds are anticipated to increase to TWD 100,000 and TWD 50,000, respectively, following revisions to the relevant regulations. The updated regulations are expected to be previewed at the end of October 2024, with implementation scheduled for January 1, 2025. Consequently, starting 2025, small businesses will be exempt from paying business tax provided that their monthly turnover remains below TWD 100,000 for goods and TWD 50,000 for services.   If the individual online seller conducts transactions for profit by purchasing and selling goods, the “average” total sales volume over the previous six months was previously used to determine whether the treshold for tax registration was reached. However, recognizing the increasing frequency of online transactions in recent years, Taiwan’s Ministry of Finance has revised […]

Taiwan implemented the “Act for the Recruitment and Employment for Foreign Professionals” to attract and retain foreign professionals in Taiwan and create a more welcoming work and residency environment in 2018. This act introduced the Employment Gold Card, a single document that integrates a work permit, residence visa, Alien Resident Certificate (ARC), and re-entry permit. This card is aimed at professionals with specialized skills in fields such as technology, economics, education, culture and the arts, sports, finance, law, architecture, defense, and digital industries, or those recognized as having special expertise by relevant authorities in consultation with sectoral agencies. Several benefits of the Employment Gold Card: An open-ended personal work permit that does not require employment with a specific employer and allows freedom in job searching, changing jobs, and taking on part-time work. Cardholders’ spouses and minor children can apply for dependent residency in Taiwan, and the duration of stay for […]

The New Work Trend in the Post-Pandemic Era The global impact of the COVID-19 pandemic has transformed the way we work and live. As remote work becomes the new norm, traditional office spaces are no longer a necessity. With just a laptop in hand, professionals can now work seamlessly from anywhere, enjoying the flexibility of location-independent jobs. This shift has inspired many professionals to break free from traditional workplaces and embrace the “Digital Nomad” lifestyle, blending work with travel to explore the world, seek freedom, and spark creativity.   What is a Digital Nomad? A Digital Nomad is someone who combines work and travel by utilizing digital skills to work remotely, free from the constraints of time and place. These individuals choose living environments that best suit their needs while enriching their lives through global travel. Digital nomads typically fall into three categories based on their work style: Remote Employees: […]

Labor regulations in Taiwan undergo revisions every year in response to social and economic developments, as well as changes in the labor market. In 2025, Taiwan’s labor regulations will undergo several significant changes aimed at further protecting workers’ rights, improving working conditions, and promoting corporate compliance. The following are the key changes in labor regulations for 2025:   Adjustment of the Minimum Wage The labor regulations for 2025 include an adjustment to the minimum wage. Based on the current economic conditions and the cost of living, the minimum wage will be moderately increased. This measure aims to ensure that workers have sufficient income to meet their living expenses and improve the economic conditions of low-wage workers. Starting in 2025, the monthly minimum wage will be TWD 28,590, and the hourly minimum wage will be TWD 190. Revision of the “Monthly Contribution Classification of Labor Pension” and Automatic Adjustment In line […]

The Mid-Autumn Festival is one of the most important Chinese festivals, and many companies take the opportunity to present gifts to their clients or employees. In Taiwan, if a company distributes its own inventory as gifts, this should be regarded as the sale of goods, and an invoice must be issued based on the sale price, with business tax declared and paid accordingly. However, if the items were originally purchased with the intention of being given as gifts, and the input tax was not claimed as a deduction against output tax, the company is exempt from issuing an invoice.   Here’s an example: Company A purchased 100 units of inventory at a total cost of TWD 100,000 with input VAT amounting to TWD 5,000. At the time of purchase, the input VAT of TWD 5,000 was claimed as a deduction against the output VAT. Later, when Company A decided to […]

In Taiwan, companies can be categorized into three types: limited company, limited company by shares and foreign branch office. According to Taiwan’s Company Act, when establishing a company, the founders (shareholders) must hold a meeting to determine the company’s capital amount. The funds should then be transferred to the company’s designated bank account, and a certified public accountant must complete the capital verification before applying for company registration. The capital amount can be understood as the initial operating funds registered for the company. Currently, there is no minimum capital requirement; however, it must be reasonably sufficient to cover the company’s expenses for the first year, including rent, salaries, office equipment, and other costs.   In Taiwan, a limited company has only a total capital amount. Once the shareholders have determined the capital amount in the articles of incorporation, the actual funds must be in place in order to establish the […]