I’ve got a pretty confusing situation on my hands.
I’ve been in Taiwan since back in February 2016, with lots of trips in and out to nearby countries.
My question is, what’s my better option at this point:
Try to file a self assessment tax return with the UK tax office (this will be late and I’m thinking will probably incur penalties)
Or should I try to go and pay taxes here in Taiwan as I believe I’m not late on the deadline for this?
I’m worried if I do the latter that the taxmen in the UK will chase me down later and require tax, meaning I’d get burned twice on my earnings.
I have very little financial ties to the UK and I rent an apartment here in Taiwan, also don’t foresee myself going back for any meaningful length of time in the next year or so, therefore I feel I qualify as a non-resident in the UK for tax purposes.
Would paying tax here in Taiwan save me from UK taxes? (Considering the two countries have a double taxation agreement). If so, what % of my earnings would I need to pay here, would it be a flat 18% or would it be 12% as my income falls in between the 540,001-1,210,000NT band. I’m not sure if these different bands only apply to ARC holders or if they apply to anyone that’s been here more than the 183 days.
Sorry for the incoherent ramblings, I’m just pretty stressed out about this and I’m trying to save up money for a worst case scenario.
Having an ARC or not is irrelevant for tax purposes, as tax resident status is determined by the 183 day rule (unless the tax treaty somehow changes that).
Self employment income (“income from professional practice”) normally has a 20% withholding rate for both residents and non-residents iirc, but you get more deductions than with employment (“salary”) income. (The people at the tax office would know for sure.)
Thanks for the reply, I’m not sure how useful deductions would be for me as my landlord will not allow me to claim my rent (home is place of work) as a deductible.
20% on my entire earnings would work out much higher than if I were to pay UK tax (which has a personal allowance that is a non-taxable amount, with tax being taken off the top of that), if I paid my UK tax and had proof of this, would this be accepted by the Taiwan tax people in consideration of the double taxation agreement?
I work on line and all of the money I make comes from other countries into Taiwan. I just did my taxes (actually my wife did) and the tax office stated that I didn’t need to claim (or even write it down on the form) the money I made doing freelance work as long as it was under 1 million NT.
You can’t claim the rent the way you would if you had a traditional job (as a resident), but you should be able to claim it as a business expense. The tax office would know.
I have two income streams. Teaching English (which I just quit to do freelancing full time) and my freelancing work. When combined, the money I made is over 1 million NT. According to the tax office, I still didn’t need to claim the money I made freelancing.
I’m not sure if this is because the tax office doesn’t combine the two income streams or if freelancing work is treated differently.
“Gaofei” (writing articles etc.) is tax exempt for the first $180,000. The only place I remember seeing a $1m exemption is in the Basic Income Tax (or Income Basic Tax).
To be honest, I don’t know why they did it the way they did. They even argued when I wanted to claim the amount on the form. I wanted to claim the amount because I’m looking at moving back to Canada in a few years and I want to be able to prove that I’m making money as a freelance editor.
They stated that I didn’t need to claim the money because I didn’t need to pay tax on it. They let me write the amount I made editing on the form but it didn’t increase my tax.
This has been the same way they’ve done it for the past couple of years.
I hate to revive and old thread but I have a hard time believing that you pay 0 tax on income earned by anyone residing in Taiwan even if it’s never coming into the country.
Ok so everything that falls under Article 8 is individual income…
Does that not mean that any income earned while residing here counts as basic income and is thus taxable?
I earn income by contracting for a foreign entity over the internet and get paid to a foreign bank. Seems unlikely that I wouldn’t pay taxes on it (it’s way below the 6.7 million limit but over 1). I’d love for this to be true but taxes are usually one of those unavoidable things like death.
I’ll only have to file starting next year that’s why I’m asking here and not running to the tax office.
Income Basic Tax Act http://law.moj.gov.tw/MOBILE/lawEng.aspx?pcode=G0340115
Article 12
The amount of basic income of an individual shall be the sum of the net taxable income as calculated in accordance with the Income Tax Act and the amount which is under the provisions of the following subparagraphs:
Income, which is derived from sources outside the Republic of China and is excluded from gross consolidated income, as well as income which is exempted in accordance with Paragraph 1, Article 28 of the Act Governing Relations with Hong Kong and Macau. However, if the aggregate of the two mentioned sources of income in a filing unit is less than NT$1,000,000, it may be excluded from the basic income.
What is relevant here is where the job was done, just the mere fact that the remuneration comes from overseas does not make it overseas income. Overseas income is income for work done overseas, i.e. when the worker/freelancer was physically outside of Taiwan while doing the task at hand.
Only exception to the above is per Article 8.3 in the above mentioned law is if the employer is not based in Taiwan AND the employee is based in Taiwan for less than 90 days during the tax year.
If the mere fact that your employer is not based in Taiwan would entitle you to a million tax free per year I can guarantee every single employer in Taiwan would be registered overseas.
Remuneration for services rendered within the territory of the Republic of China, provided that this shall not apply to remuneration obtained from an employer without the territory of the Republic of China by an individual not residing in the Republic of China but staying in the Republic of China for a period of not more than ninety days during a taxable year;
The above is the relevant part for this discussion. You sitting at your computer at home doing service X is services rendered in Taiwan, just as sitting in hsinchu science part assembling widgets is services rendered in Taiwan irrespective if the employer is a overseas company.
Is the inverse true? If I work in Taiwan but travel to other country on business trip. Would days of those business trip would count as “foreign income” for Taiwan tax calculation?
