The “Tonnage tax regime” provision of the Income Tax Law, as recently approved by the Executive Yuan, allows the taxation of marine transport income to be switched to a tonnage tax. Once the new system is implemented, it will be highly beneficial to large shippers and is thus expected to prompt ships to return to Taiwan registry as well as to stimulate development of the domestic maintenance and other peripheral industries.
The Ministry of Finance indicates that the present method of taxing marine transport income is based on a shipping company’s actual operating income. Neighboring countries such as Japan and Korea, however, use “derived profit” in calculating income from marine shipping as a means of encouraging international shipping firms to invest and set up companies in those countries. Taiwan’s new rules will strengthen the competitiveness of its own shipping industry by allowing shippers to choose between a tonnage tax or profit-seeking enterprise income tax when calculating income from marine shipping. Continue reading »
Annual bonuses paid to employees are not recognized as monthly remuneration and need not to be combined with monthly payment for withholding tax. Withholding tax for the bonus at the rate of 6% shall be deducted.
From Jan 1 2010, individual overseas income of the whole family exceeding NTD 1 million every year shall be recognized as basic income. According to Article 7 of Income Tax Act, the taxpayer shall be the person 1) who has domicile within the territory of the ROC and resides at all times within the territory of the ROC; 2) who has no domicile within the territory of the Republic of China but resides within the territory of the Republic of China for a period of more than 183 days during a taxable year. Failure to report overseas income will result in all such income being taxable. Income earned in mainland China, however, will continue to be subject to income tax in accordance with the provisions of Article 24, Paragraph 1 of the Statute Governing Relations between the Peoples of the Taiwan Area and the Mainland Area. Income earned in mainland China, whatever its amount, will not be included in the alternative minimum tax.
The government is instituting new policies and measures designed to create a better living environment. New measures to be instituted in 2010 to forward the interests of the public include a reduction in the consolidated income tax rate and an adjustment of the labor insurance occupational accident premium. Continue reading »
Based on Item 3, Paragraph 1, Article 8 of the Income Tax Law of the ROC, if an alien stays in the ROC for more than 90 days during a taxable year, the remuneration he/she receives from his/her employer(s) outside of the ROC for services rendered within the territory of the ROC shall be considered as ROC-sourced income and he/she is required to file such income received in the Roc with the relevant tax authority-in-charge within the ROC and pay tax thereon. Continue reading »
Responding to the trend toward environmental protection and the need to reduce air pollution and carbon dioxide emissions, the Executive Yuan recently approved a draft revision of the Commodity Tax Act that will cut the tax by NT$25,000 for each newly purchased and registered LPG (liquefied petroleum gas) /gasoline dual-fuel vehicle for five years, beginning with the date of the revised law’s implementation. With the NT$25,000 refueling vouchers that are already being offered for the new purchase or retrofitting of dual-fuel vehicles, this adds up to a total saving of NT$50,000 per vehicle.
The Ministry of Finance notes that current government policy calls for the development of high-energy-efficiency and low-pollution vehicles. Since the vehicles used in Taiwan primarily use gasoline or diesel fuel, which cause relatively high emissions of carbon dioxide, the government hopes that the proposed tax cut will boost the incentive for drivers to buy dual-fuel vehicles and for the auto industry to develop or import dual-fuel vehicles. Approximately 5,200 vehicles are expected to receive this benefit within five years. Continue reading »
Ministry of Finance has further relaxed customs procedures for free trade zone goods in line with the July 2009 revision of the Act for the Establishment and Management of Free Trade Zones. The relaxation will benefit free trade zone companies that engage in business and trade activities, and facilitate development of the MICE (meetings, incentive travel, conventions, and exhibitions) industry. Continue reading »
13. Comprehensive service rendered by foreign corporations within the territory of the ROC refers to those services concerning various businesses simultaneously (e.g. service combining use of patent, service performance and equipment rental). Tax collection authority shall first clarify the category of the incomes obtained by performing the service and classify the incomes in accordance to respective nature other than recognizing all the incomes as other profits.
Income from aforesaid comprehensive service which is subject to operation of industry, commerce, agriculture, forestry, fishery, animal husbandry, mining, and metallurgy corporations shall be recognized in accordance with Item 9 Article 8 of the Act. In case the income from operation within the specified business scope is subject to natures of Item 3, Item 4, Item 5, Item 6, Item 7 and Item 11 Article 8 of the Act, categories of the income shall be classified. Continue reading »
6. “Rental obtained from lease of property situated within the territory of the ROC” stated in Item 5 Article 8 of the Act refers to rental obtained from lease of property within the territory of the ROC as follows:
(1) Real estate: House or land situated within the territory of the ROC.
(2) Movable property:
I. Movable property registered within the territory of the ROC, such as ships, aircrafts or vehicles; or negotiable securities offered/issued or traded in the ROC with approval from competent security authority, such as stocks, bonds, TDR or other negotiable securities. Continue reading »
1. The principles are made for determining the income from sources in the ROC regulated in Article 8 of Income Tax Act (hereinafter called as the “Act”).
2. “Dividends distributed by companies incorporated and registered in accordance with the Company Act of the ROC or by foreign companies authorized by the ROC government to operate within the territory of the ROC” stated in Item 1 Article 8 of the Act refers to the dividends distributed by companies incorporated and registered in accordance with the Company Act of the ROC, excluding profit repatriation by branches of foreign companies incorporated within territory of the ROC. Continue reading »
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