A lady friend of mine is offered a job with a Taiwanese company here in Taipei. Since she will start working on November 1st, her salary will be taxed on a flat rate (20%), which she well understood. However, the company advised her not to declare her income for the year 2002 (Nov and Dec) to avoid the 20% tax. Instead, everything will go normal starting from January 2003. The manager of the company explained that since she won’t have to go to the tax office next year, so everything will be ok. When she needs to go to the tax office (2004), the tax officer won’t care about the tax in year of 2002.
She is now applying for her ARC as the company has already issued the necessary documents.
Please advise if the above arrangement is legal, and if it is not, what are the legal consequences for both the employer and the employee?
Thanks a lot!