Jun 24

According to Jun15, 2010 Gazette 09900150571 by Executive Yuan and Gazette 6927 of Office of President of ROC, the corporate income tax rate was amended from 20% to 17%. The Presidential Executive Order amends Article 5 and Article 126 of ROC Income Tax Act. According to the newly amended Income Tax Act Article 126, new corporate income tax rate 17% and exemption TWD120,000,stipulated in Article 5, is effective in 2010.

written by Good Earth

Jun 11
From the overview of Asian corporate income tax rate, previous rate of 20% in Taiwan are now cut down to 17% just like 17% in Singapore and 16.5% in Hong Kong. This way will have more chance to compete with China’s 25%, Korea’s 22%. This can boost the overall economic and industrial development should even create more employment opportunities for Taiwan. The reformation of low tax burden benefit all industries, it will provide a better and competitive investing environment for everyone.

written by Good Earth

Jun 10

By the end of January of each year, company should be careful before issuing tax withholding vouchers, check on the actual payment of the total amount of the taxpayer and the withholding tax, in order to avoid clerical error or computer error led to a short reporting of withholding voucher, the company although voluntarily made corrections to the taxes authority, shall not apply to taxes levied section 48 of Act 1 of the regulations - automatically make a report after the provisions of impunity.

According to Tax Law Article 114, section 1, paragraph 2, withholding tax has been withheld, but failing to complete the withholding vouchers promptly, or the filing a report after the deadline, or the order to repay, the company shall be entitled to a 20% of withholding tax penalty: not more than 20,002 ntd, and no less than 1500ntd, unless those who volunteer reporting or automatically fill in, pay half of the minimum as penalty.

written by Good Earth

May 13

Profit-seeking enterprise who obtained government subsidies, of the Income Tax Act there is no tax provision, in principle, it should be fully reported in the filing year as “other income” tax.  This is further explained that if the profit-seeking enterprise system accepts the depreciation of fixed assets acquired or constructed or expanded facilities owned by the ad hoc subsidies, the subsidies of the acquisition of fixed assets owned by provision for expansion of facilities can be reported as depreciation of durable service life in the average yearly income.

written by Good Earth

Apr 27

Income Tax Law of the Legislative may provide 66 of the 9 amendments, corporate retained earnings up more than half the amount of capital to be distributed to shareholders mandatory whereas keeping the current practice of imposing 10% of return earning will prevent shareholders avoid paying tax.  The Ministry of Finance holds an “optismistic view.”

After business tax comes down to 17%, the company will retain the distribution of earnings, it will be conducive to shareholder tax avoidance, and it will be best supporting measures to restore the old system before the Income Tax Act.  Company’s undistributed surplus amounted to more than half of the company’s capital, must reinforce mandatory distribution. 

Tax Director Xu Yu Zhe, said retained earnings will take years to reach half the capital, prior to 1998 when a “mandatory distribution,” was implemented, many large enterprises rasied the companies’ capital to avoid mandatory distribution.  Treasury Division collected no taxes, auditing and collection of taxes were difficult.  10% abolish levy will result in more than 200 billion or nearly 300 billion in tax losses annually.

written by Good Earth

Apr 27

If an expatriate’s spouses is a citizen of the Republic of China and the expatriate is a tax resident, the couple should file annual income tax returns jointly.  However, the couple may also chooose who is dependent, the expatriate or spouse.  Aliens in the case of non-resident individuals can also choose in accordance with Article 15 of the Income Tax Act, file annual income tax jointly or pursuant to Article 73 of the same Act adopting withholding tax levied on income.  As for their choice in accordance with the provisions of article 73, the spouse shall not consolidate the expatriate’s Taiwan income for annual income tax declaration, and the withholding tax shall not be tax deductible, and no exemption and deduction are allowed.

written by Good Earth

Mar 23

After receiving an order from a third-country buyer, the local trading company company A declares to customs and exports the materials and unfinished goods to offshore manufacturer company B for processing. Company B is responsible for exporting the finished goods directly to the third-country buyer.

I. Outsourcing Processing & Direct Export (1)

  • A. Outsourcing processing and direct export

Before shipping goods abroad for outsourcing processing, an entity shall first issue the GUI on which the value (price) of unfinished goods must be declared according to the value stated on Export Declaration approved by Customs to apply for sales for goods at zero-tax-rate. At exporting finished goods processed to the third country buyer, the entity shall issue GUI with the price computing by deducting original GUI value from total transaction amount in accordance with related transaction certificate.

(Note: GUI issuance is not required for exporting of goods.)

(Explanatory Decree No. 770665884 issued on Nov 15 1988 by Ministry of Finance)

written by Good Earth

Feb 26

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 »

written by Good Earth

Feb 24

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.

written by Good Earth

Feb 22

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.

written by Good Earth