Hi Guys,
So I need to pay a media in the UK for a marketing package and my accountant is saying I need to pay 20% tax for this as the service originates outside Taiwan. I do understand how the taxing works for foreigners within Taiwan and the first 183 days but I have never had to deal with something like this in 5+ years. Does anyone have any experience with this? Thanks in advance!
You mean you’re paying a UK company for its services?
Yes that is correct, from Taiwan as a business established in Taiwan.
I’m not understanding what you are saying. Pay taxes to which country?
This is a withholding tax against Taiwan businesses when paying for some services (mostly technical services–NOT goods) to a foreign company.
You may be able to get around it by paying for the services “privately” but of course you then cannot deduct it as an expense on your business tax return.
But obviously these questions are best discussed with an accountant
There are many withholding taxes and if you are paying a foreign person or foreign company the rate will be high. These basic withholding taxing that Taiwan has in part to make is difficult to not pay taxes on Taiwan income.
Let’s say your company sets up a “contest” in the USA and the “winner” of that contest gets US$2500 (NT77,000). You pay this ‘winner (perhaps a family member)’ US$2500. And then you reduce this NT77,000 as an expense for your taxes.
Many Taiwan businesses in the past would have these secondary foreign companies and “pay” them “fees” that they would then not have to pay taxes on since they could reduce it has an expense. I believe these withholding taxes were put in to try and stop that from going on.
Thanks for the responses guys. So this is a media website that we will do advertising with. Is this considered a service in Taiwan?
You will have to ask your accountant that. I’m not sure the fine print nor am I an accountant. Perhaps there’s a way to get around it.
But salaries, services, prizes, technical and service fees, interest, rentals…all are about 18-20% tax if paid to a non-taiwan resident to non-taiwan business.
So, I just ran in to this same issue.
In my case the expenses in question are things like server hosting, domains, github account, slack, jira, etc. Basically just general overhead required in web development, but my accountant is telling me I cannot deduct any of this as I havent done the witholding tax, but most if not all of the companies in question would close my accounts if i didnt pay them in full 
Anyone else who had to deal with this, and is there some workaround ? Many of the expenses in question in my case are things that most tech companies would be using, so seems odd if a large part of the taiwanese tech sector has this problem but nothing can be done about it.
Yes, it’s complete BS. And as far as I can tell it’s completely subjective. I’ve had suppliers sell me “products” with free “service” included and clients used to ask me to do the same.
My eventual solution was to just stop taking Taiwanese clients and do all work through an off-shore LLC.
I can confirm I’ve seen the same thing. Not a fan.