Taiwan

When Taiwan companies declare employees’ annual salary income from the previous year, including various income and exemption certificates, if an employee has participated in voluntary pension contributions during that year, the amount of the contribution should be deducted in full of the total salary income to avoid overpaying taxes.   According to Taiwan’s “Enforcement Rules of the Labor Pension Act,” the amount of voluntary pension contributions within 6% of the monthly salary is not included in the taxable income for the year of contribution. Therefore, when Taiwan companies file the “Withholding and Non-withholding Tax”, they should correctly report the amount of voluntary contributions made by the employee in the “Amount of Voluntary Contributions under the Labor Pension Act” field, and the total payment amount must deduct the voluntary contribution amount in full.   For example:   In 2023, the employee’s total monthly salary is NT$43,000 (the salary classified for contribution […]

To comply with the Anti-money laundering policies, Taiwan companies shall declare the shareholding information which shareholders holding the shares more than 10% on the shareholder declaration platform affiliated with TDCC (Taiwan Depository & Clearing Corporation) on March 1st to 31st annually.   The platform aims to curb money laundering only, so the declaration information will not be allowed to be disclosed to the publics, but the government authorities or courts remain the rights to utilize the declaration information for any money laundering case if necessary.   In principle, the obligators to proceed the declaration are Taiwan companies, except for Taiwan branch office, listed company. Unlimited Company, Unlimited Company with Limited Liability Shareholders, Company Limited, Unlisted Company Limited by Shares shall all required to proceed in accordance with laws, even for suspending companies.   For the deadline of declaration, the new company shall proceed the initial declaration within 15 days from […]

Taiwan companies don’t have to pay taxes if the company have a great deficit within the first few years. Upon making profits, the losses incurred from the past few years are not possible to recover the offset, which is different than other countries.   In order to offset the losses, the following conditions are required to be met:   1: The identity is required to be a company or profit-seeking enterprises. 2: Proceed tax return by the due date. 3: Complete accounting books. 4: The losses and profits at the fiscal year shall be endorsed by a certified accountant.   For tax return by the due date, from the position of Taiwan Taxation Bureau, the due date is included the tax return and payment.   For example, company A suffer losses on 2022, but it sold its real estate to earn about TWD 1,000,000, excluding house and land transaction income […]

In regards to if the unemployment income received by Taiwan employees should be charged with taxes or not, first of all, we have to understand whether such income is “One-off Payment” or “Instalment”.   The unemployment income is counted as separation pay, including retirement pension, severance pay, separation pay, lifetime pension, non-insured old-age pension and so on, which are privileged to benefit the tax exemption/   For the unemployment income, the provisions and examples of the fixed allowance in 2023 are as follows:   One-off Payment First stage: if the lump sum is less than NT$ 188,000 multiplied by the length of service, the income will be 0.Second stage: if the amount exceeds NT$ 188,000 multiplied by the number of years of retired service, and the amount is less than NT$ 377,000 multiplied by the number of years of retired service, half of it shall be regarded as income. Third […]

Upon the termination of employment contract between employer and employees, it is required for the employer to notify such termination to the employee in advance. Advance notice period is a protection termination measure, which aims to make sure the mutual parties have sufficient times to prepare and handle. If the employer fails to notify the termination in advance, it is required to compensate the employee the wages during the advance notice period.   The advance notice period is as varied as different service period, the advance notice period including the weekend and national holidays. The advance notice period of employment cessation as below: Where a worker has worked continuously for more than three months but less than one year, the notice shall be given ten days in advance. Where a worker has worked continuously for more than one year but less than three years, the notice shall be given twenty […]

For any Taiwan employees who intend to cease their employment, it is required to notify their own employers in advance. If the notice is failed to proceed, the employee is possible to recover the losses of employer, apart from meeting the exceptional terms, such as violence from employers, failure to proceed the remuneration pursuant to regulations, without notice of cessation of working from employees in advance.   In accordance with Labor Standards Act, the termination of employment (cessation of working) shall be notified to the employer in advance. The advance notice period begins from the day after the date of submission of termination, which is calculated as “day”. For example, an employee submits the cessation at 10:00 p.m. this evening, so tomorrow is the first day of notice period to calculate.   The advance notice period is as varied as different service period, the advance notice period including the weekend […]

Upon the occurrence of major transaction or the Taiwan companies’ merger invested by foreign entrepreneurs, MOEA usually request the applicant to present the independent expert opinion. Independent expert is referred as the third party like lawyer, accountant or securities broker who is not involved with the merger or others, so the qualification certificate of such experts is also required. In the condition of the expert being a foreigner, it is required to notarize the qualification certificate by the local notary offices.   The issuance of independent expert opinion letter should include the following contents:   The background and goal of issuance; The financial information of mutual parties, including the balance sheet, profit-and-loss statement, and shareholder equity changes statement; If one party to the merger is a foreign company, it shall state that the foreign company meets the cross-country merger requirements, including whether it is a company with actual business activities, […]

Taiwan electronic game arcade business is designed for publics to enjoy the puzzle and entertainment games. To manage the electronic game arcade business, “Electronic Game Arcade Business Regulations Act” was enacted by MOEA in accordance with the models of games and sites to manage and execute the registration, inspection, and punishment these related managements of electronic game arcade business. 1.    Game Arcade The kinds of game arcade are divided into “Puzzle”, “Ball Bearing”, “Entertaining”. It is not allowed to display unverified categories and announcement of game arcades or revise the verified categories of game arcades randomly. 2.    Site Electronic game arcade business is categorized as “General guidance” and “Restricted”. For general guidance, the stie is only allowed to pose puzzle game arcades for children, youths, and general publics to play. Reversely, the ball bearing, entertaining or additional particular puzzle game arcades are only to be posed and open […]

From January 1st 2024, the average monthly wages from TWD 26,400 are adjusted into TWD 27,470, increasing TWD 1,070, in growth rate 4.05%, announced by Taiwan Ministry of Labor. Furthermore, the average hourly wages are also adjusted from TWD 176 into TWD 183, increasing TWD 7 accordingly.   From the further explanation by Ministry of Labor, followed with the increasing of daily necessities price, the average wages must be risen as well to cover and maintain the basic requirements of livelihood.  Considering of the rise of annual CPI , increasing of 17 daily necessities, economic growth rate and overall financial phenomena, the adjustment of wages this time becomes a mandatory measure.   Why is it necessary to set up the average wages? The purpose of setting is to protect labors’ basic livelihoods as well as purchase capabilities to broaden and promote the gross domestic production.   According to the article […]

Upon the payment of service fees to foreign companies from Taiwan companies, it is common for the foreign company to apply for the avoidance of double taxation agreement, or the qualification of lower income in accordance with the article 25th in Income Tax Act. However, some foreign companies where the registered country doesn’t have an agreement with Taiwan, or the type of payment is not affiliated with “Any profit-seeking enterprise having its head office outside the territory of the Republic of China, and which is engaged in international transport, construction contracting, providing technical services, or machinery and equipment leasing, etc., in the territory of the Republic of China” one of the aforementioned categories would fail to be applicable to the lower tax payment rate. Despite of the application to “Taiwan income source recognition principle at the point 8th of article 8th in Income Tax Act” (referred to “recognition principle” hereafter), […]