Taiwan

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 […]

The payment and collection via mobile becomes prevalent and popular around the world. The payment via cash is substituted by the mobile gradually. The common payment apps in Taiwan are Apple Pay, Line Pay, and JKOPay. Besides, payment mobile is also included third-party payment and electronic payment. Although these functions are all counted as mobile payment, the nature and scope of business is totally different. In regards to the third-party payment, due to the insecurity occurred easily between buying and selling mutual parties, there would be a trustworthy third party to be the agent. Usually, the buyer proceeded the payment to the agent and the seller would send over the product to the buyer upon receival of payment from the agent. The above-mentioned transaction is affiliated as physical transaction collected by the agent. The major difference between third party and electronic payment is that the electronic payment is included collection […]

In Taiwan, here are 3 most common ways for profit-seeking enterprises to proceed tax returns: Expanding to the cases, audit by reviewing accounting books and tax compliance audit. To promote the convenience for small and medium-sized enterprises to proceed tax return, enterprises which total amount of net income and non-net income is under TWD30,000,000 within a whole year and are willing to rise the lower profit margin after settlement in the declaration of the end of fiscal year up to the standard of expanding to the cases promulgated by the government to calculate the income tax and settle down the payment of tax by the deadline are able to adopt the audit by reviewing papers to lower the risk of tax investigation by Taxation Bureau in accordance with “Regulations Governing Assessment of Profit-seeking Enterprise Income Tax” (Called as “Paper Reviewing Regulations”).   For profit-seeking enterprises adopting the audit by reviewing […]

Proof of Business Tax Return   This article aims to introduce the issuance of uniform invoice in practice. The introduction as below:   The expenditure items required to state on the tax withholding form and submit to Taxation Bureau Input credit and proof for accounting of business tax Proof for accounting of business tax but no input credit incurred   The following items shall be proceeded tax withholding and stated on the tax withholding form to Taxation Bureau:   (a) The withholding shall be proceeded as the wage income tax withholding table in the basis of monthly wages. (b) Part-time workers shall be withheld the amount of tax in 5% and sign on the backside of payroll and affidavit. (c) The amount of commission more than TWD20,000 or equivalent shall be withheld the amount of tax in 10%. (d) The amount of rentals more than TWD20,000 or equivalent shall be […]