Viewpoints

2024-05-23

Taiwan House and Land Transactions Income Tax

To curb the phenomenon of flipping properties in Taiwan, the new Income Tax Act is revised the taxation regulations toward to selling estates (abbreviated as “House and Land Transactions Income Tax” hereafter), which was implemented on January 1st, 2016. The taxation brackets are as varied as the holding period, the longer you hold, the lower the tax rate is. This aims to encourage the owner to hold his/her properties as long as possible as well as to curb the property flipped. However, a lot of owners still try to get around the rule to avoid the taxation, so the specific taxation model of house and land transactions income tax was added on July 1st, 2021, which is abbreviated as special shareholdings transactions:   Pre-sale houses and situated foundations. Direct or indirect transactions of holding shares or capital amount is more than a majority of domestic or foreign profit-seeking enterprises. The […]
2024-05-08

Introduction to Taiwan Industrial and Commercial Certificate

Taiwan Business Certificate is an IC card used by limited companies, branch offices, limited partnerships, and other businesses registered under Taiwan’s Company Law and Commercial Law for online identity verification. Recently, companies can directly use this certificate to apply for various electronic related businesses online, without being restricted by the time and location of case submissions, which can simplify the overall application process and improve application efficiency. After receiving the main card of the Business Certificate, companies can apply for additional cards based on internal management needs or business requirements, and these cards can be obtained within approximately 14 working days.   Applying for a Business Certificate offers many benefits, as it allows for the online application of many services to speed up the process, including:   Handling company tax filings and shareholder reports; Electronification of company utility and electricity bill accounting; Enrollment and changes in employee labor insurance and […]
2024-04-26

Taiwan Company Representatives Tax Regulations

No matter foreigners or Taiwanese to be the responsible person of Taiwan company, the tax regulations will be varied as different as the country of tax residents.   Residency and holding the household registration in Taiwan within 1 to 31 days (with Taiwan labour insurance, health insurance, national pension, or spouse and children in Taiwan). Such as overseas Chinese (if the period of residency is less than 31 days, it is defined as non-tax residents.) Residency and holding the household registration in Taiwan more than 31 days (with Taiwan labour insurance, health insurance, national pension, or spouse and children in Taiwan). Such as Taiwan citizens, Taiwanese on foreign business trips. Without household registration in Taiwan but staying in Taiwan more than 183 days. Such as foreign workers in Taiwan (with tax liability shall proceed the annual income tax return in May each year.)   Here is the comparison for Taiwan […]
2024-03-12

Taiwan Migrant Workers Retention Scheme Adds New Open Categories and Long-term Employment Program

Taiwan’s Migrant Worker Retention Scheme, which has already approved the transition of over 4,000 migrant workers to mid-level positions, is currently being amended by Taiwan’s labor department to further relax regulations. New additions include mid-level technical jobs in slaughterhouses and an increase in the number of hours for in-house training courses provided by manufacturing and slaughterhouse businesses to 80 hours as a technical qualification. Furthermore, the scheme now allows the spouse, direct blood relatives, and collateral blood relatives within the third degree of kinship to employ as migrant caregivers who have worked for 11.5 years and have already left the country.   The slaughterhouse industry in Taiwan has been open to migrant workers for six years. To retain experienced migrant workers in the slaughterhouse industry for mid-level technical positions, considering the increasing demand for meat consumption and the yearly increase in the number of slaughterhouses, there’s a need for mid-level […]
2024-03-12

The Benefits of Taiwanese Employees Voluntarily Contributing to Their Pension Fund

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 […]
2024-02-06

Taiwan Company Shareholder Declaration

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 […]
2024-02-01

Taiwan Company Real Estate Execution Tax Return Period

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 […]
2024-01-16

Taiwan Employee Unemployment 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 […]
2024-01-04

Employment Termination Advance Notice

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 […]
2023-12-20

Taiwan Employment Cessation Procedure

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 […]
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