2022 Taiwan and Saudi Arabia Tax Treaty in Effect
On November 2021, Ministry of Finance in Taiwan announced the tax treaty with Saudi Arabia is about to be in effect from January 2022. This treaty is not only the 34th effective one for Taiwan, but also the first one for Taiwan to officially connect with Middle East. Currently, the investment items with Saudi Arabia includes engineering, electric engineering, chemistry and computer parts. Upon the treaty in effect, it is undoubted that the trading activities will be more beneficial for both parties. According to the data from Ministry of Finance in Taiwan , the total trading amount between Taiwan and Saudi Arabia is TWD 5,140,000,000 by the past 8 months approximately, which percentage surges 25.2%. The export of products from Taiwan to Saudi Arabia are automobiles, motorcycles, steel materials; Reversely, the export of product from Saudi Arabia to Taiwan is oil majorly. From the statement issued by Ministry of […]
Recruitment and Keep International Talents in Taiwan
With the loss of competition with international talents in recent years, the new act “Act for the Recruitment and Employment of Foreign Professionals” (Abbreviated as Foreign Talent Act hereafter) is implemented and validated from December 8th in 2018 to make up for the losses. To increase the willingness for foreigners to work in Taiwan, the government looses the strictness of regulations for foreigners to apply visa, work and stay in Taiwan as well as optimizes the welfare of insurance, rental and retirement to make a better environment for foreigners. To reinforce the recruitment and keep the international talents ,promote the innovative ability of industries and develop 6 core strategic industries in Taiwan, it is quite urgent and thirsting for talents all around the world. In addition, for the reconstruction of the cycle of global industries owing to the Covid-19 pandemic, the government further revise the Foreign Talent Act on […]
Qualification for offsetting the Paid Foreign Business Tax in Taiwan
It is a very common phenomenon that a majority of Taiwan’s businessmen choose to invest in cross-country enterprises. However, according to the article 3rd in Income Tax Act in Taiwan, for the location of head office of foreign enterprises within the territory of Taiwan, such profit-seeking enterprise in Taiwan shall comply with the laws to declare the profit-seeking income tax. The domestic and oversea income shall be declared jointly. In spite of the limited coverage of tax treaty in Taiwan, for oversea enterprises which complied with the tax law in the designated country to pay the amount of taxes, such enterprise is able to present the proof of taxation promulgated by Bureau of Taxation within the territory of designated country to offset the profit-seeking enterprises income tax payables in Taiwan with the paid amount of taxes converted into TWD. Here are two points which shall bear in mind for Taiwan’s […]
CFC Regulation in Taiwan – Individual
CFC Regulation in Taiwan – Individual The purpose of Controlled Foreign Company (Hereafter referred to as CFC) regulation is to avoid profit-seeking enterprise, which established its company in low-tax rate burden country (Profit-seeking enterprises income tax rate less than 14%, like BVI; or only pay the domestic income tax, like Hong Kong or Singapore)without any practical business activity via CFC, evading the tax payable with the practical control or shares to get away with the policy of surplus distribution of the company in Taiwan. Therefore, the policy to curb tax evasion promulgated at the article 43-3 in Income Tax Act was established officially on 27/07/2016 to balance the entire regulation of taxation. With the upcoming deadline of special law of repatriated fund within the last two years till now (the law will be expired on August.), CFC regulation is about to come on the heels of it in 2020 by […]
The Latest Par Value System for Company Limited by Shares in Taiwan
For the sake of full correspondence of par value of Company Limited by Shares, which was enacted in the old version Company Act in Taiwan, the system of par-value stock was born hereafter. Due to no minimum amount of par value of shares regulated by laws, it is workable to set a super low amount of par value in the articles of incorporate to ease the difficulty of fundraising the amount of par-value stock theoretically, which is lower than the actual amount of par value. However, the explanation issued by Ministry of Finance in Taiwan is stated that the unit of par value shall be “Dollar”, which means the minimum amount of par-value stock in Taiwan must be higher than TWD1. With this explanation, the theory to ease the difficulty of fundraising by the super low amount of par value is no longer accessible. To tackle down the fundraising problem […]
Issuance of Stocks for Company Limited in Taiwan
Several types of shares without certificate, but registration in TDCC (Taiwan Depository & Clearing Corporation), are still deemed as legal issued shares. Such shares are solely levied on transfer tax. However, other types of transacted stocks without certificate are deemed as property transactions. Such transaction is not levied on transfer tax, but levied higher on individual income tax. Here is a similar case occurred recently. A company which original capital is 6 million in TWD. After years gone by, the company is quite reputational and successful, but the founder is too elder to manage this company and decide to transfer his company by stocks in 14 million in TWD to others. Nevertheless, the issued stocks were not certificated by banks, neglectful of the article 162 in “Company Act”, which means it is not a legal stocks transaction, despite of the success of this transfer. The nature of this transaction is […]
The Important Notice for Tax Reduction in Taiwan (For whom paid tax in China)
The Important Notice for Tax Reduction in Taiwan (For whom paid tax in China) For Taiwanese who have any source of income in China, these citizens should declare the individual income tax in May annually with the tax incurred in China jointly. Therefore, If the tax in China has already declared and paid, the tax payable in Taiwan can be deducted from to avoid the event of dual imposition of tax occurring. To whom he/she takes part in any kind of business activity between Taiwan and China regularly, if he/she is an official tax resident in Taiwan, instead of in China, the individual income tax should be declared necessarily. Most of the income in China is able to be his/her tax withheld at source, such as the salary withholding statement in China, which can be the tax payment certificate. For example, an office worker who has to commute from […]
Postpone of 2021 Annual General Meetings in Taiwan
Due to the surge of COVID-19 infections in Taiwan, the Central Epidemic Command Center currently raised the COVID-19 alert to Level 3, gathering of over 5 people in indoor and over 10 people at outdoor is banned. The Financial Supervisory Commission promulgated that starting from May 24, 2021 to June 30, 2021, all public companies (including listed, OTC, emerging and foreign company listed in Taiwan), shall suspend the holding of AGMs. The key measures are summarized as follows. Suspension Period: From May 24, 2021 to June 30, 2021, during which public companies shall not convene their annual general meetings (AGMs). Statutory requirements that companies listed on the Taiwan Stock Exchange (TWSE) and the Taipei Exchange (TPEx) must convene their AGMs by the end of June and the penalties for failure to meet such requirement are exempted. New date and venue of the AGM to be held in July or August […]
Supplementary Premium for Dividends Income in Taiwan
Supplementary Premium for Dividends Income in Taiwan When an individual in Taiwan obtains dividends income, even though it would not be withheld in the income tax, it may be deducted for 2nd generation National Health Insurance (NHI) supplementary premium. If the taxpayer declares directly with the account credited amount, it may cause an omitted declaration and may face a penalty for supplementary tax payment. For example, Mr. Cheng is a major shareholder of Company A, who received TWD618,610 as dividends in 2018. However, since the amount has reached the deduction threshold, an amount of TWD11,815 has been deducted as supplementary premium for 2nd generation NHI. The amount that Mr. Cheng actually received through bank deposit is TWD606,795. A problem raised during the next tax return declaration. Since, Mr. Cheng did not receive a physical stub for the dividend’s payment due to digitalized working procedures, he revised the […]
Attention to the List Price for Taxable Goods or Services in Taiwan
Attention to the List Price for Taxable Goods or Services in Taiwan Business models and styles have been more diversified nowadays. No matter the business is run online or in physical stores, the list price of taxable goods or services should include business tax in it. However, some online stores claim that they do not include business tax in the list price and require an additional 5% business tax charge to their clients, which lead to consumption disputes. Taiwan National Taxation Bureau indicates that business tax is a kind of consumption tax. When a company is selling taxable goods or services, it should include the consumption tax in the selling price and collect it from the consumers. Therefore, according to the Value-added and Non-value-added Business Tax Act Article 32 Paragraph 2 and 3, the list price for taxable goods or services should include business tax. In other words, […]