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

Feb 08

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 »

written by Good Earth

Jan 26

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 »

written by Good Earth

Jan 22

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 »

written by Good Earth

Jan 19

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 »

written by Good Earth

Jan 11

To meet the practical operating and management needs in customs, the Ministry of Finance (MOF) has revised the Regulation Governing Customs Bonded Factories so that, in the future, when bonded factories are unable to withdraw all of the scraps and waste materials which have been declared to Customs and on which tax has been paid from the factory by the stipulated deadline, the factory may, within one week, amend the amount and carry out tax rebate matters with Customs.
The MOF’s Department of Customs Administration notes that under the original rules, bonded factories that manufacture bonded goods could estimate the amount of scraps and waste materials that they expected to produce within a three-month period, apply to Customs for prior declaration and payment of tax due, and then remove the materials from the factory in separate batches. If the factories were unable to remove all of the materials within the three-month deadline, they could apply for a one-month extension.

written by Good Earth

Dec 28

Tax Treaty between Israel and Taiwan was signed on Dec 24 2009 and will take effect on Jan 1 2010. It is the 17th tax treaty between Taiwan and foreign countries. The treaty will prevent double taxation, deter tax evasion and ensure the equal treatment of taxpayers in both countries. Officials also hope the new agreement will serve as an incentive to entrepreneurs in Taiwan and Israel.

written by Good Earth

Dec 25

In case Taiwan signs tax treaty with China in future, the Taiwan entity, without permanent establishment in Mainland, undertaking construction job under contract or providing technical services shall be exempt from business income tax in Mainland as long as the service term is no longer than a certain period (6 months or 12 months in general).
Taiwan business income tax rate will be decreased to 20% from 2010, which is lower than 25% in Mainland. In the past, all Mainland-source income of a Taiwan entity would be subject to Mainland business income tax. If the tax treaty between Taiwan and Mainland is signed, Taiwan entities can save part of expense on business tax.

written by Good Earth