Taiwan

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), […]

According to “Company Act” in Taiwan, the shareholders of company limited by shares remains the rights of share transfer as their own resolutions. It is not required to declare or change the registration of share transfer. Instead, the share transfer in company limited shall be approved by the majority of shareholders. Here are two points to be aware of: To proceed the change of ownership (This is company internal procedure.) Upon the transfer of shareholder registration, it is required to submit gift tax payment certificate issued by the competent authority, verified tax-exemption certificate, or exclusions from the total amount of gifts certificate.   After transferring, what kinds of taxation procedures for transferor (supposed the original shareholder is an individual) to face are?   First of all, we have to confirm the type of organization is company limited by shares or company limited. In the condition of company limited by shares, […]

Thanks to the growth of self-media, more and more people choose to become an Internet celebrity as their career. Moreover, even professionals work as slashies on YouTube to gain extra profits apart from their original job. Some of them set up a studio and others are micro influencers to operate, so the types of income become much complicated than ever.   It is important to understand clearly of the types of incomes, which might be applicable to the withholding tax rate. For example, if the incomes are counted as royalties, the amount of tax exemption is TWD180,000 every year. For incomes from professional practice, like performers, it is applicable to the norms issued by Ministry of Finance to proceed taxation.   According to the research, the common incomes can be divided into 3 categories, including “Advertisements benefits-sharing”, “Subscription”, “Merchandise Sales”, “Activities Notices”, “Bonuses from clicking the advertisement link”, “Advertorial”, “Salary […]

tickets online, rentals, and buying cars..etc.. In order to accelerate the progress of purchasing, the sellers usually would draft a copy of standardized contract and circle the signature area for buyers’ arrangement. It is much easier to have a conflict with sellers in the condition that the buyers didn’t go through the standardized contract in detailed perusal.   Normally, the standardized contracts don’t have a fixed format. Except for papers, subtitles, posters, signboards, or online announcements and other ways are also counted as standardized contracts. For example, it is common to see the poster “No return, No exchange” around shops on the street as well as to tick the “Agree” button on the user agreement before playing online games, which are all categorized as the types of standardized contracts.   Here are three primary standardized contracts in Taiwan: Financial Consuming Standardized Contract Such as application of credit card or covering […]

Many technology industries and startup companies attract employees by implementing shares subscription. Currently, here are 5 kinds of remuneration measures for Taiwan employees as enacted in Company Act: 1. Remuneration stocks, 2. shares subscription and capital increase by cash, 3. Distributing buybacks, 4. Shares subscription certificate, 5. Restriction of shares subscription. Kindly remind that the other incomes of employees can be exempted after reaching the terms and obtain the stocks, but the company shall declare this fact to Taxation Bureau in accordance with Income Tax Act.   For employees who subscribed the shares by cash, the employee don’t have to combine it into the individual income tax upon the date of subscription in accordance with Income Tax Act, but upon the date of disposal (or stock option execution date) must exceed the subscription (or stock option exercise price) at the current price on that day The difference is taxed as […]

For companies which plan to set up a gymnasium or hold up sporty training classes, like street dance classrooms, gymnasium, yoga classrooms, or gym, the venues which square meters are under 300 are not required to apply for a special license. The company is able to start their business immediately after applying for the recognition of training sessions upon registration of company. The applicant should be aware about the following terms upon application: The address of sporty classThe address of sporty class shall be complied with the municipal or county examining standards. Normally, it is possible to understand if the address is qualified for application with the land registration transcripts and land ownership certificate. It should be noted that the virtual address is not allowed to set or hold up the sporty classes. Related licensesThe personnels shall hold the national physical fitness instructor certificate issued by Taiwan or foreign reputational […]

In Taiwan, a company must register its company address within the territory of Taiwan. Some investors would choose to register the company address in their own residential or relatives and friends’ address for saving costs. For a residential address to be the company address, the house tax, land value increment tax, land tax, and the individual income tax of building owner would be affected in consequence. Also, the utility expenses are calculated in the basis of business operation rate. Kaizen is going to introduce the types of tax which would be affected for investors’ reference to evaluate registration in a residential address or commercial center which way is much preferential.   House Tax According to the article 5th in Hose Tax Act, the house tax rate for a residential address is 1.2%. If the residential address is used as a company address to register, the recognition of residential address would […]

For foreigners who obtain the approval of employment from Taiwan Ministry of Labor, they have to visit the Taiwan official entity situated at their local countries to apply for the visa before entering the territory of Taiwan. The holder shall exchange the visa into ARC (Alien Resident Certificate) to start working in 5 days from the date of entry.   The basic privileges for foreigners working in Taiwan as following:   Health Insurance For ARC holders, the national health insurance is mandatory to cover during the period of residency in Taiwan. The coverage of such insurance is all necessary medical expenditures, including paramedic, hospitalization, dental, Chinese medicines and prescribed medicines. The insured person still needs to afford a fixed amount of fees upon visiting a medical treatment, but the rest of amount will be covered by the national health insurance. Thus, it doesn’t need to worry about the medical and […]

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 […]