Viewpoints from Kaizen

Apart from the business of Taiwan company itself, the company which proceeds the investment concurrently and receives the dividends from the invested company is counted as dual-status business entity. The dividends received by the entity shall be combined into the last term of that year (which is the business tax return in November and December, the deadline is by the January 15th on the next year.) for coverage of the sales income for tax exemption, including dividends incurred from investment for Taiwan and foreign marketable securities and undistributed surplus earnings. Such income shall be declared with the net number of dividends in accordance with the Taiwan tax regulations. The common false is the dividends received from domestic or foreign companies are not listed into the tax exemption sales income to proceed tax return at the last term of that year and failure to adjust the non-deductible ratio in accordance with […]

For companies where business address is registered within Taipei City, the application “Business Location Pre-check” is required to be proceeded by Taipei City Hall before registration of a company, change of registered address and adding of business items to make sure the business items are complied with the regulations of urban plan and architectural management or other related laws.   Despite such pre-check is not compulsory for each district, apart from Taipei City, it is still suggested for the company to confirm if the registered address is fully complied with “Regulations on Land Use Control” as well as “Building Management Regulations” by signing the rental agreement. In the condition that such registered address is not under compliances, or the practical business is different than the business items submitted upon the application, the company would be requested to move out from the address and the water and voltage would be halted […]

Taiwan labor insurance is a job-based insurance. Labors who physically wok in Taiwan are qualified for the coverage. However, the labors who meet the following special conditions are also qualified for the coverage, even unemployed temporarily.   Serve military service, leave without pay during injury or sick or suspension during cases Under the status of employment, the insurer (company) cannot reject the coverage for insured persons (labors) and the application shall be submitted in papers. For those during injury or sick leave without pay, injured or sick for a period of less than one year, or absence from work for a period of less than two years as a result of industrial accident, it is required to submit the proof of diagnosis issued by clinics or hospitals. During the period of additional insurance, insured persons are not allowed to adjust the amount of insured salary randomly and the insurer is […]

Online transaction (E-commerce) is a booming type of marketing (trading) model, which means it can broaden its placements other than physical activities. Despite of its additional value, Organisation for Economic Cooperation and Development (OCDC), European Union (EU) and USA deem this type of transaction as physical transaction to levy taxes. Taiwan Ministry of Finance also follow their steps to stipulate related business tax and income tax regulations on online transaction to levy taxes.   From 2023, company which run their businesses through online platforms, apps, or other digital ways to proceed sales of labour forces and goods exclusively or concurrently shall register its “Domain Name” and “Member Account” as well as disclose its company name and uniform invoice number on the websites or apps clearly.   For companies which tax number was registered by 31/12/2022, if such companies would proceed online sales of goods and labour forces from 01/01/2023, it […]

The year to which export sales or service revenue belong shall be in basis of the date of customs declaration upon export sales and listed as income at that fiscal year. In the circumstance that the export sales were made by postal express or delivery agent, the basis date shall be in accordance with the date of stamp, instead of the date of payment made by buyer to list it as income.   In the condition of the export sales through customs, according to the item 2 in article 15th in “Regulations Governing Assessment of Profit-seeking Enterprise Income Tax”, the export sales shall be listed as income at that year of date of customs declaration, but for freights in small and light package which delivered by postal express or delivery agent, the basis date shall be in accordance with the date of stamp to recognize the fiscal year.   On […]

For encouraging exports, the export of physical products or services are applicable to zero tax rate of business tax in Taiwan. That is, the income earned from sales of exports is not only applied to zero tax rate but also refunded the input tax in full. The business tax can be exempted from imposition for encouragement of earning foreign currencies.   However, for zero tax rate applied to exports of labour forces in practices, although such encouragement is stated clearly in articles, the explanation of ordinances for both parties is different all the time. According to the article 7th in Business Tax Act “Services relating to export or services provided in the R.O.C. but used in a foreign country is applicable to zero tax rate”. The basis of labour forces “provided in the R.O.C. but used in a foreign country” is hard to judge, or the view of recognition for […]

Terry was an engineer in USA and worked there physically, but owing to the global Covid-19 pandemic, each employee has no choice but work from home and selects their preferred working hours, so does Terry, so Terry got back to Taiwan working remotely and accustomed to this habitual working condition. However, should the payment received by Terry be counted as oversea income or Taiwan domestic income to proceed tax return in 2023?First of all, we have to figure out if the taxpayer holds a household registration in Taiwan as well as enjoy the privilege of health and labour insurance or not. Supposed that such individual holds the household registration in Taiwan, we have to see if he/she would stay in Taiwan over 31 days or 90 days and his/her main source of income from Taiwan or not. One of the standards to judge is whether the spouse and children underage […]

With the growth of digitalized economic activities, to establish a “permanent entity” at the income incurred country seems not necessarily. For software industry, it is much convenient and accessible to provide their service online cross-country, so the taxation occurred on which country is becomes more unrecognizable.   For current service models in software industry, the models can basically be divided into the following 3 types from the history of development:   (1) Sales of Standardized Software (2) Sales of Non-standardized Software (Customized) (3) Online Model: SAAS, Software as a Services   In the circumstance of being a foreign software service provider, it is suggested to understand the definition of business conduct in Taiwan and the duty of taxation.   Sales of Standardized Software For physical sales of software without customized software service, the income is counted as general international trading recognition. That is, the income from customers solely be levied […]

From 2023, Taiwan companies are obliged to proceed the registration of online sales within the specific period at Taxation Bureau. The company official website shall disclose the “Company Name” and “Uniform Invoice Number” clearly. The companies and e-commerce platforms will be informed such notice by Taxation Bureau shortly after.  Kindly remind that the companies engaging in online sales shall be aware of the validity of change of tax ID registration and comply with the related laws and regulations, or the violators will be imposed with the fine from TWD 1,500 to TWD 15,000 and punished for each offense.   In addition, for individuals who engage in online sales for the profit-seeking purpose, the tax ID is required to be registered for those who reach the tax threshold (monthly sales of labour forces more than TWD 4,000 or sales of goods more than TWD 80,000). All online sales entities shall be […]