Aug 03

Article 4

For a foriegn special professional who has met the requirements in the preceding Article, during the first three years starting from the year when he/she for the first time has resided in the R.O.C. for a full 183 days of the year and has had an annual salary income of over NT$ 3 million, one half of the amount of the salary income exceeding NT$ 3 million of each such year may be excluded from the gross amount of consolidated income of the year for the assessment of individual income tax liability, and if he/she has obtained the income set forth in the provisions of Subparagraph 1, Paragraph 1, Article 12 of the Income Basic Tax Act, such income may be excluded from the income basic tax.
The term “first three years” in the preceding paragraph shall start in the year when the foreign special professional for the first time has resided in the R.O.C. for a period of 183 days or longer, and has had an annual salary income exceeding NT$ 3 million. The first three years shall not start in the year when the foreign special professional starts to apply for the tax incentives under Article 9 of the Act in accordance with Article 5 herein.
The term “salary income” in the first paragraph shall refer to the amount of aggregate salaries which may be calculated in gross amount of consolidated income paid by onshore and offshore employers in accordance with the Income Tax Act and other applicable laws for the foreign special professional’s engagement of the professional work under the provisions of Subparagraph 2, Paragraph 1, Article 3 herein.
If a foreign special professional has not resided in the R.O.C. for a period of 183 days or does not have an annual salary income of more than NT$3 million within the three-year period set forth in the first paragraph, the reduction and exemption of the taxes under Article 9 of the Act may be deferred to other employment periods in the R.O.C. for the year when he/she has resided in the R.O.C. for a period of 183 days and when his/her annual salary income exceeds NT$ 3 million. The total number of years eligible for the reduction and exemption of taxes shall be limited to three years.
The term “other employment periods in the R.O.C.” in the preceding paragraph shall refer to the period a foreign special professional was engaged in professional work and the duration of extensions of a foreign special professional approved.
The deferral period mentioned in the fourth paragraph above shall start from the year of the first-time in accordance with the first paragraph and continue without interruptions for a period not over five years.
Link:
https://law.moj.gov.tw/Eng/LawClass/LawAll.aspx?PCode=G0340150

written by Good Earth

May 21

Taiwan Branch of a Foreign Multinational Corporation applying for and signing APA may reduce the taxation risks from a post-tax review

According to National Taxation Bureau of Taipei, MOF, a worldwide frequently seen Transfer Pricing System is established to ensure the taxing powers, preventing corporate tax avoidance or reduction from unconventional business arrangements. Due to a usual huge amount of money and complexity of transactions among multinational corporations and their affiliates, the both parties of the taxpayer and the tax imposer must contribute costs and workloads to the post tax review. To avoid tax related disputes and administrative burdens aroused from the post tax review, businesses may apply for Advance pricing agreement (APA) with the taxation bureau to reach an agreement on the result of conventional transactions.

The Bureau goes on to elaborate that APA allows the taxpayer to negotiate with the taxation bureau to discuss, according to a comparable party, the transaction results, hypothetical conditions, pricing principles, calculation methods, applicable periods, and other main concerns and to reach an agreement. The agreement is applicable for 3 to 5 years and can be extended for another 5 years under the both parties’ consensus if there are no substantial changes on the environment and the facts related to the agreement. Submitted by the Taiwan branch of a well-known international brand the other day, an APA application has been successfully reviewed by the Bureau and signed by the both parties. This has created a double-win situation for both the taxpayer and the tax imposer.

The Bureau appeals for signing an APA to not only ensure a multinational corporation’s obligation as a taxpayer but reduce the taxation risks derived from the post tax review.

written by Good Earth

Nov 02

In order to recruit Ph.D. professionals studying overseas, Ministry of Science and Technology (MOST) provides a subsidy of NTD 6,250 per day for study abroad elites to get a job back to Taiwan without financial worries. In addition, Taishan Investment and Management Consulting Ltd., recruiting Internet of Things, will invest about NTD 40 billion respectively in AI and biotechnology funds with a view to offering more financial aids for the startups.

Ministry of Science and Technology (MOST) launched the first wave of LIFT project this May, recruiting 100 overseas Ph.D. elites who are R.O.C citizens under 45 years old to work back in Taiwan, supported with a total NTD 1.5 million of life subsidies by the government.

A national grade “Taishan Investment and Management Consulting Ltd.,” has been founded and expected to be partly funded at the end of this year. The first wave is to raise funds for the Internet of Things to invest approximately NTD 40 billion in the field of AI. The second wave will be raising funds of NTD 40 billion for the development of biomedical industry, with a view to offering financial aids for the setups.

written by Good Earth

Oct 31

Being passed today (2017/10/30) in the Third Reading by Legislative Yuan, the Law of Recruitment and Employment of Foreign Professional Talents loosens restrictions on the applications for the employment visa, residence, Insurance of the foreigners coming to Taiwan, and also entitles them benefits of taxes and retirement. At the same time, the regulation that foreign professional talents must stay 183 days every year in Taiwan while being employed is abolished. The employment period is also extended from 3 years to 5 years.

The Law of Recruitment and Employment of Foreign Professional Talents regulates that the foreign professional talents themselves may apply for “employment gold card”, which includes the Work Permit allowing changing jobs freely, Resident Visa, ARC, Re-Entry Permit. In addition, those foreign professionals who earn 3 million or above are entitled to enjoy 3 years’ tax privileges that half of the annual gross income is exempted from the individual income tax computation.

written by Good Earth

Oct 03

According to a statistic from Financial Supervisory Commission Taiwan, the total amount of deposits among the domestic banks is up to 36.82 trillion NTD, and the total amount of loans is 26.79 trillion NTD. That is a total amount of 10 trillion idle funds possessed by the domestic banks.

Due to the record highs of idle funds among the domestic banks, there are some banks relaxing mortgage regulations, including lowering interest rates and rising Loan-To-Value Ratios (LTV Ratio), to attract the public to apply for loans, and to cooperate with new construction plans to launch a high LTV Ratio of 80%.

written by Good Earth

Sep 30

Extracted from China Times

Sept. 26, 2017

Mainland China tourists are not coming and hotels are crying for sale? Beginning this year, at least 600 hotels throughout Taiwan are said to be selling off, seemingly an unstoppable tide of resale. The trend of investing in the hotel industry since 2008, the commencement of Taiwan’s Open-Door Policy to mainland tourists, has boosted an increase of tourism hotel rooms by 6,000 to reach 28,000 rooms and general hotel rooms by 46,000 to reach 152,000 rooms, but the upcoming new tourism hotel rooms, amounting to 14,000, account for half of the existing tourism hotel rooms. The average operational condition of the tourist hotels in Taiwan bears market impact, resulting in a gradual slide of the average rate of occupancy from 72% in 2014 to 67% in 2017.

Sept. 28, 2017

With a great decrease of mainland tourists in Taiwan, the DDP government is taking a proactive measure of New Southbound Policy. Following the “Taiwan Tourism Development Forum” held yesterday, Yong-dian Liao, GM of Hwafu Tourism Group – one of the first two leading travel agencies, pointed out that “The low consuming power of the countries from New Southbound Policy has severe impacts on the tourism industry chain. Rumors spread that the big two HongKong-funded shopping sites with serial losses are considering closing their businesses in Taiwan, which may cause a sharp rise of unemployment in the tourism industry.”


written by Good Earth

Sep 29

National Immigration Agency

The issued ID No. for expatriates consists of 2 letters and 8 numbers, 10 digits in total.

The first letter indicates regions. (Note 1)

The second letter indicates sexes. (Note 2) The first 7 numbers are a serial number, and the last number is a check digit.

Note1: The letter stands for City and County:

A Taipei City, B Taichung City, C Keelung City, D Tainan City, E Kaohsiung City,

F New Taipei City, G Yilan County, H former Taoyuan City, I Chiayi City, J Hsinchu, County

K Miaoli County, L former Taichung County, M Nantou County, N Changhua County,

O Hsinchu City, P Yunlin County, Q Chiayi County, R former Tainan County,

S former Kaohsiung County, T Pingtung County, U Hualien County, V Taitung County,

W Kinmen County, X Penghu County, Z Lienchiang County.

Note 2:

Taiwanese residents, people from Mainland China, Hong Kong, and Macau:

A stands for male. B stands for female

Foreigners:

C stands for male. D stands for female

written by Good Earth

Sep 19

Huang Nubo, president of Beijing Zhongkun Investment Group, opines that the real estate industry in China has slumped down to a vicious circle, like quenching thirst with poison, where the whole industry bears trillions of assets and debts at the same time while its sluggish capital turnover is nibbling up its profits and interests. Smaller real estate businesses may have chances to turn around, but the bigger players may not get away from going bankrupt.

written by Good Earth

Sep 12

United Daily News Sept. 12, 2017
Dr. Hsu, Jen-Hui/ Professor of Dept. of Public Policy and Management, Shih Hsin University, former Deputy Minister of Finance

Former Premier Lin Chuan’s tax reform proposal prior to his resignation has brought into discussions and questions. It is necessary to decipher and figure out the objective and the beneficiaries regarding the tax reform.

Ministry of Finance claims such reform may narrow the wealth gap and redistribute income, elaborating that the rich and the average may severally benefit an estimated 30 billion gain from the tax reduction for dividend income. The average still benefits from more tax deduction and the rich lowering tax rates. The average’s gain accounts for 60 percent out of a total estimated 100 billion from the tax deduction.

This specious interpretation, however, completely ignores the population of both parties. According to the analysis of 2014 income tax declaration data, the number of the rich people declaring their tax rate above 40% is some 47,000, while the number of the average taxpayers is 6,033,000 strong. The declared dividend incomes of the both parties are fairly equivalent, roughly 430 billion dollars respectively, but an average taxpayer gains less than 5,000 dollars from tax reduction for dividend income, whereas a rich one gains up to 627,000 dollars. It is obvious to see who the beneficiaries are.

The highest individual consolidated income tax rate falls from 45% to 40%, from which the immediate beneficiaries are those who declare their incomes over ten million dollars by 45% tax rate, amounting to 12,143 families in 2014. The tax reform will not only reduce their tax rates but also substantially relieve their anticipated tax burden in that partial exemption or discriminatory tax is imposed on dividend income.

Compared the tax payment situations in 2011 with those in 2012 about the declared taxable income higher than 10 million (the 2011 highest income tax rate was 40% and the tax credit of dividend income was 100%), it reveals that the income tax revenue increases from 89.7 billion in 2011 to 169.8 billion in 2012. It is due to not only the increased numbers of the taxpayers but also the tax rates rising to 45% and the tax credit of dividend income decreasing to 50%.

Now the DPP’s tax reform proposal with a lower tax rate on the income and favorable taxation on the dividend income is actually in favor of those “minorities” who are 2 out of 1,000 taxpayers that their income comprises mostly of the dividend income (about 3/4) while wages consist mainly of the income (about 80%) of the general public.

Ministry of Finance plans to raise the corporate income in response to the losses of tax revenue from the favorable taxation on the dividend income. Although the rich people will receive fewer dividends, the general small shareholders’ dividends shrink as well. The rich enjoy the benefits from the tax reduction, while all of the shareholders must bear together the rising corporate income tax! Given that the corporate income tax increases, the decrease in the net profit may result in falling stock prices, lower investment ability and desire, and even pricier products, and all of these are paid by the general public!

written by Good Earth

Apr 30

19. Company selling investment products should be aware that if an investment product is not the security as stated under the provision of Securities Transaction Tax Act, the income tax that ceased to be imposed as stated in Article 4-1 of the Income Tax Act does not apply.

20. In the case of profit-seeking enterprises selling shares without the certification or authentication as prescribed in Article 162 of the Company Act, it is recognized as property transaction not as securities transaction. Therefore, when declaring gains or losses of such transactions, it is often mistakenly declared as securities transactions with tax exemption.

21. In the case of a profit-seeking enterprise having no permanent establishment but having a business agent within the territory of the Republic of China, the business agent concerned shall be responsible for filing of income return according to Item 2 Article 73 of the Income Tax Act. Because the profit-seeking enterprise is not authorized by the R.O.C. Government, it is not a “foreign company” as defined in the R. O. C. Company Act, which is not a “company” as stated in Item 1 Article 39 of the Income Tax Act. Therefore, there is yet to be any applicable regulations for offset between profits and losses.

22. Profit-seeking enterprises should compute and declare depreciation expenses for individual assets according to an inventory. However, when a Certified Public Accountant making an assessment and certification, he or she only samples and excludes the ones that exceeds the maximum depreciation expense, but neglects the regulations regarding the depreciation of fix assets being continuously presented annually according to the rate as stated in Item 2 Article 95 of Regulations Governing Assessment of Profit-seeking Enterprise Income Tax and thus fails to adjust the depreciation expenses according to regulations.

23. Companies which received government subsidy for research and development expenses not only should declare the subsidy as income but also deduct the amount from the research and development expenses.

24. The losses incurred from the sales of goods or services as prescribed in Article 39 of the Income Tax Act for profit-seeking enterprises is also applicable for educational, cultural organizations or charities, given that the organizations keep a complete set of account books, use the Blue Returns in the years such losses occurred and in the year of declaring such losses, or such losses have been duly certified by a certified public accountant and declared within the prescribed period. Then, the losses can be used as deductions from the sales income in the next 10 years. However, if the losses are not from the sales of goods or services, Article 39 of the Income Tax Act does not apply.

25. Even though a tax return has been duly certified and filed by a Certified Public Accountant before the deadline, if the tax is not paid in full or paid before the deadline, it is stilled considered as regular tax return and the preferential treatments such as a higher entertainment expense limit and the offset between Profits and Losses can no longer apply.

26. In case of a profit-seeking enterprise with its head office within the territory of the Republic of China declaring its incomes from both within and without of the territory of the Republic of China, special attentions should be paid in checking if all the foreign incomes corresponding to the deductibles from taxes paid in the source countries are declared.

written by Good Earth