Individual Tax Issue for Taiwan Businessmen under Covid-19

Due to the global impact from Covid-19, hundreds of Taiwan businessmen abroad are not able to return back to Taiwan, which causes their household registration in their place of residency removed by the competent authority. According to the statement issued by Ministry of Finance in Taiwan recently, the declaration of individual income tax will become recognized much easily. In the circumstance of any doubt about the identity of businessmen, the way of declaration can be proceeded as last year. On the side of land value tax, the application of self-occupied preferential rate is not required the household registration shall be “Personally”. The household registration can be registered as the spouse or lineal relatives.

On the side of individual income tax, those who hold the household registration in Taiwan, live and earn income in the domestic territory, or those without the household registration in Taiwan, but who stay in Taiwan more than 183 days within one year. The abovementioned persons shall proceed the declaration of individual income tax in the accumulated rate 5% to 40%.

From the indication by Ministry of Finance, the epidemic prevention measure is temporary, which is not able to be the recognition of change of residency, but each revenue service office will depend on the applicable articles in Individual Income Tax to deal with each case. If the recognition of identity is still doubtful, the way of declaration can be proceeded as last year and the evidence can be provided dependent on each case upon the request of each revenue service office.

On the side of land value tax, the main factor to consider is the application of self-occupied preferential rate. Based on the statement issued by Ministry of Finance, to apply for the self-occupied preferential rate in two one-thousandth is not limited in the ownership of land with “Personal” household registration. Such household registration can be registered as spouse or lineal relatives to pay the amount of taxes in two one-thousandth. In addition, In the circumstance that the taxpayer change the household registration, but whose spouse or lineal relatives register under the original household registration by September 22th of the next year, such person is still qualified for self-occupied and applicable to apply for the self-occupied preferential rate. The land value tax can be applied to self-occupied preferential rate of the next year of change of household registration after being approved the revenue service office in the place of their residency.

For example, the owner of property who is applicable to self-occupied preferential rate, but cannot return back to Taiwan owing to the impact from Covid-19, which resulted in the household registration was removed, since nobody occupied this property and register the household registration by 2021/12/01. However, The rate in two one-thousandth in 2021 is still applicable if the owner of property, spouse, or lineal relatives move into the household registration by 2020/09/22. Due to the period of taxation of land value tax from November 11th to 30th each year, the rate in two one-thousandth in 2022 is still applicable.