Viewpoints
2021-03-22
Individual Online Sellers Should Apply for Taxation Registration The threshold of individual online sellers who run online businesses for profit-making purpose, was based on the total “average” sales in the last six months. However, online shop transactions have become more frequent in recent years, the Taiwan Ministry of Finance issued an explanatory order at the end of January 2020, stating that the business tax threshold of online seller has been changed and based n the total sales of “each month”, i.e. sales of goods exceed NTD 80,000 or sales of labour services exceed NTD 40,000. Sellers should apply for taxation registration for their business, which is stricter than before. According to the regulation (Order No. 10904512340) issued by The Taiwan Ministry of Finance on 31 January,2020, in considering with the fairness and online transaction practices, individuals who sell goods or labour through online for profit-making purpose, should apply […]
2021-03-22
Documents Required for Taiwan Companies Reporting Overseas Investment Loss According to the Regulations Governing Assessment of Profit-Seeking Enterprise Income Tax Article 99 Subparagraph 2 “Investment loss should provide prove on capital reduction to cover losses, merger and acquisition, bankruptcy or liquidation. However, if the invested business located in a foreign country and did not participate in any actual operating activities, company should provide related documents on the business, which engaged in actual operating activities and caused losses to the invested enterprise due to business losses, that the enterprise shifted its investment to. The mentioned documents should be verified or certified by Taiwan Embassy, Commercial Representative Office or Foreign Trade Organization. For those in Mainland China, documents should be verified or certified by the organization managing issues on people’s relations between Taiwan and Mainland China, which was appointed by the Mainland Affairs Council ROC (Taiwan) of Executive Yuen.” For […]
2021-03-22
Common Mistakes of Foreign Company Applying Taiwan Income Tax Act Article 25 According to the profit margin stipulated in Taiwan Income Tax Act Article 25, simplifying the calculation of part of the contract costs is one of the services that many foreign companies often apply for when they run their business in Taiwan. There are four types of applicable scope of business, including (1) operating international transportation, (2) contracting construction projects, (3) providing technical services, (4) leasing machinery and equipment, in Taiwan. If there are difficulties in dividing the cost of the above mentioned 4 types, with the approval from Taiwan Ministry of Finance, foreign company operating international transportation can calculate its income within Taiwan at 10%. For the other 3 types, income is calculated at 15%. So, the withheld income tax rate has been reduced from 20% to 3% (i.e. 20%*15% = 3%). Taiwan National Taxation Bureau […]
2021-03-22
Attention to the Prescription on the Outstanding Accounts Payable for Taiwan Companies It is inevitable that accounts payable happens in businesses. The Taiwan National Taxation Bureau reminds that when companies declare for corporate income tax, it is important to pay attention to the prescription on various kinds of outstanding accounts payable, which can vary from 2 – 15 years. Furthermore, if a payment is unsettled upon prescription, it must be changed to other income in accounting in that current year. When Taiwan companies file tax returns, many expenses will be listed as expenses in the year in which rights and responsibilities are incurred. But in fact, the payment has not yet been paid. Since the Civil Code Article 125 to 127 stipulates prescription for various payments, it continues to be delayed until the time limit of the creditor’s claim expires, in theory, the Taiwan company does not have to […]
2021-03-17
U.S. Tax Tips When You Got a PPP Loan Paycheck Protection Program (PPP) loan is intended to help small businesses maintain payrolls and continue necessary payroll-related payments like rent and utilities. And if you meet the criteria, the loan may be forgiven. However, some small business owners do not know how to deal with this PPP loan forgiveness when they file the tax return. This article will give you some tips. Congress specified, and the IRS clarified, that forgiven PPP loans will not count as taxable income. This applies whether your entire loan is forgiven or just a portion. For the expenses paid with PPP loan, IRS initially stated that those expenses cannot be deducted if the loan was or will be forgiven. However, that changed with the coronavirus relief act signed into law on Dec. 27, 2020, which specifies that deductions should not be denied simply due […]
2021-03-17
Tax Changes You Need to Know Before Filing Your U.S. 2020 Tax Return There are several tax changes or annual inflation adjustments for tax year 2020. This article will give you a short checklist of tax changes you need to know before you file the 2020 tax return. Stimulus Checks During 2020, as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act’s $2 trillion relief package, the government sent up to $1,200 in the form of a stimulus check to millions of Americans. But do you know how to report your stimulus checks income when you file the tax return? The good news is your stimulus check will not count as taxable income. Eligible Americans who did not receive the first or second payment can claim a Recovery Rebate Credit based on their 2020 income on the 2020 tax returns. Standard Deduction Standard […]
2021-03-17
An Overview on Shenzhen Individual Bankruptcy Regulations China’s first regulation on individual bankruptcy, the Regulations of Shenzhen Special Economic Zone on Individual Bankruptcy, came into force on 1 March 2021. An overview on the said Regulations is enclosed hereby for your easy reference. Who can file for bankruptcy? According to the Regulations, eligible debtors and creditors both can file bankruptcy petitions to the court. The debtors who can file for bankruptcy shall meet the following requirements: (1) have been living in Shenzhen and have paid social insurance for 3 consecutive years in Shenzhen; (2) unable to pay off their debts because of business struggles or problematic consumption or their assets are insufficient to pay off all the debts. The creditors who hold more than RMB500,000 due creditor’s rights against the debtor alone or jointly can also file a bankruptcy petition to the court when the […]
2021-02-23
Why I Receive the US Form 1099-INT? If you received interest more than $10, you would get a Form 1099-INT. A 1099-INT tax form is a record that a person or entity paid you interest during the tax year. You may not have to pay income tax on all the interest it reports, but you still need to report this information on the return. The Internal Revenue Service requires most payments of interest income to be reported on tax form 1099-INT by the person or entity that makes the payments. This is most commonly a bank, other financial institution, or government agency. The form 1099-INT will include your Social Security Number or Taxpayer Identification Number and the amount you received. When you file your tax return, you don’t need to attach the copies of the form 1099-INT you receive, but you need to report the information from […]
2021-02-23
The Impact of Taiwan Civil Code New Amendment on Taxation According to Taiwan Civil Code, the age of majority has been lowered to 18 years old. The Taiwan Executive Yuen also amended the regulations of tax allowance in the Income Tax Act and the Estate and Gift Tax Act accordingly. In terms of income tax, what is affected is the dependent support regulations. According to the previous version, the taxpayer’s children who are under 20 years old or over 20 years old but are still in school, physically or mentally disabled or unable to earn a living can be filed as dependent support by their family, which would increase the tax allowance for the declaring household. After the Civil Code is amended, the tax act no longer defines the age of the children being supported, instead it follows the Civil Code to examine if the target is an […]
2021-02-23
Prepare for Your U.S. Tax Return The tax season is coming. Kaizen highly recommend you gather and prepare you tax documents in advance for your 2020 tax return. The sooner you file the tax return, the sooner you will get you refund. This article will give you a checklist of basic documents you should prepare. Personal Information Social Security numbers and dates of birth for you, your spouse and other dependents on your tax return. If someone does not have a Social Security number, you will need their tax identity numbers instead. Copies of last year’s tax return, if possible. Income Information Income from employment: you should receive the Form W-2 from your employer. Investment income: Various Form 1099, such as1099-INT or 1099-DIV. Income from state and local income tax refunds and/or unemployment: Forms 1099-G. Alimony income: taxable alimony received (only appliable to divorces finalized before January […]