1st year working in Taiwan with JFRV, not sure about taxes

I arrived in early 2007 so I’ll make the 183 day rule this year (I will definitely be staying longer). I’m on a JFRV and I’ll be working with a company that’s not used to employing foreigners, they don’t really know the rules (they asked me). So I’m wondering what should I tell them to do with my taxes? Do I have to tell them to withhold 20% every month for 183 days? Or is it legal to pay a normal resident tax rate for the entire year because I’ll be staying longer than 183 days anyway (so no point withholding them if your getting it back later)? I read this topic http://www.forumosa.com/taiwan/viewtopic.php?t=59580 and the OP said it was okay but I’m not sure at all as no-one replied to his latest post :confused:

So basically I want to tell the company the best solution that won’t give either of us any problems later. Any ideas? Also its not required but it would help if you could also link to a Chinese language page with the revelant tax rules (I did try to find them myself honest). Thanks!

Legally your employer will have to withhold at the 20% rate until you reach 183 days present in Taiwan in one calendar year. After that they can withhold less than the normal amount to compensate for the rest of the year. If they have any questions about this, they can contact the withholding desk at their local tax office.

While they may be able to get away with withholding less, they could find themselves in trouble later. To do so they would need to fill out the withholding form with incorrect answers to whether you have been here 183 days.


The other worth looking at also is depending on your income level, try an work out what your tax bill would be and if necessary get them to withhold 20% all the time, that way you get a refund at Tax declaration time rather than a bill

Do you mean they can withhold less than the normal resident tax rate so I get some money back that way? Or do I get some money back when I file next year (which is how I thought it worked, get taxed the standard rate after 183 days and then file for refund for first 183 days next year)? Thanks for the help it’s much appreciated.

Traveller: Thanks for the suggestion I’ll consider that option.

I meant to reduce withholding to the bare minimum after the 20% period is up. You’ll get the 20% withholding for 6 months. Let’s say your tax rate for the whole year will end up at 9% though. After the non-resident 6 months is up, instead of withholding at the 9% they would normally take for your tax bracket, you can ask them to withhold less than that. That way when you file your taxes next year you will not have as much to be refunded. I think the minimum they can withhold is 6% though.

On the other hand, if you’d prefer the government to hold your money for more than a year without paying you any interest, you can do what Traveller suggests. If you withhold at 20% for the whole year and your effective tax rate ends up being 9% then you’ve let the government keep an extra 11% of your salary and then you have to go beg them to give it back.

Thanks for the fast help jlick your solution sounds very good to me. I’ll go with that.