Bank assessing "withholding tax" on savings account interest?


#1

I’ve had accounts with a few banks during the last ten years, and none of them has done this before: A few months ago I opened a regular savings account at Cathay United and I noticed, after the first interest deposit this June, a deduction that amounts to 20% of the interest. The explanation in the passbook says “代扣稅額.”

I’ve never seen this before, and my other two banks haven’t done this. Has this happened to anyone else? I will go to the bank next week, but wanted to ask here first.


#2

Happens to me every year (with BOT).


#3

Then you were lucky they never did that before.
Happening to me for nearly two decades.
Also, if you own Taiwan stock and company issues cash dividend, the securities bank account will do the same thing.


#4

The good news is that, if I’m not mistaken, it will be 100% refunded next year, unless you fail the 183 day test or exceed the limit for income from “investment”.


#5

Yeah, it happens to me with my Fubon account, but not with my Post Office account. I’ve never quite figured out why.

My most significant hassle with this: I don’t know how to get the paperwork in my taxes. The tax office always has the records and adds it in, but the trivial number for tax paid on interest means I never quite fill out my tax forms correctly. It sometimes seems like it’s ten minutes extra paperwork for an additional NT$20 of savings on my tax bill.

EDIT: Actually, can someone explain why this varies from account to account? My wife’s Fubon account didn’t get tax deducted, and mine did, even though they’ve got roughly the same amount.


#6

If you file taxes in a tax office in Taiwan all that data are downloaded automatically.
If you file manually, you can use a reader attached to your PC that reads/scans your health care or other ID card and can download the data from tax bureau website (does not work for Apple PCs or laptops).
Worst case, just read your bank passport and note the full interest and tax deducted for each interest payment.


#7

Thanks everyone. I can’t believe this is the first time I’ve ever been assessed this tax, and I’ve had an account at BOT since 2008, as well as at a couple of other banks. Now I know.