Hello!
I am wondering…I started working (legally) here in September. Is this right? I CANNOT get any money back from my taxes paid at 20% from Sept.-December…but for the taxes that are taken away from Jan-Sept, I can get some of it back?
Is that correct?
How, when and where do we get money back from the govt?
For this year, you shouldn’t be taxed at the 20% rate. Instead, you should be taxed at the same rate as Taiwanese people. At all the schools that have hired me, if I start working before July 1st, then they withhold taxes at the same rate as for Taiwanese people, which comes to less than 10% after the standard deduction and personal exemption.
On the other hand, if I start working afterJuly 1st, then they look at my passport to see how many days I’ve already been in the country that year. If it’s already at least 183 days, then they still fill out the tax form so that I’m taxed at the same rate as a Taiwanese person.
But if it’s after July 1st and my passport shows that by December 31st that year, I will have been in Taiwan less than 183 days, then the school fills out the form so that I’m taxed at the flat 20% rate only for the rest of that year. Then in December, I notify the school (in case they forgot) that starting January 1st, they have to withhold taxes from my salary at the same rate as a Taiwanese person. And they have always agree to do this for me.
However, I have a friend who had a different experience. For him, the school refused to change the withholding amount on January 1st, claiming that he might quit before June 30th, in which case he would be liable to be taxed at the flat 20% rate. He kept trying to argue with them, but they kept refusing. So he had to put up with having a 20% chunk taken out of his salary for the next six months. Finally, on July 1st, since he had already been in Taiwan for 183 days that year, they agreed to change his withholding amount to be the same as Taiwanese people.
So then the next January, he went to the tax office and filled out the tax form (it’s a special form for foreigners) and it turned out that he was entitled to a huge refund. For Taiwanese people, they simply wire the refund to your bank account. But for foreigners, they refused to wire tax refunds. So they sent him a notice in the mail in April, and then he had to go to the tax office in person to pick up his refund, which was in cash.
Mark,
Thank you so much for your informative reply! I will definitely talk to my school and ask them to change my “status” on taxes. That will really be a huge difference (from being taxed at 20% down to 6%!)
Sonya
Further to the above reply you may also want to read the Taiwan Tax Guide at:
http://www.ntak.gov.tw/forei/eng.html
More tax info is also available at:
http://iff.npa.gov.tw/fore-eng/en_index.htm
Your school should have given you a tax statement by now, for the Jan. 1 to Dec. 31, 2001, period.
I believe that you are right that you wont get that extra 14% back, but I THINK you should still be elligble for some of the standard rebates and deductions.
I am not 100% sure about this, but the tax office will tell you when you go to file your income tax (which you must do).
Simply go there with your passport, ARC, and tax statement. Fill out your name and then give the clerk all your paperwork and ask her to help you calculate your time in taiwan, and any rebates you may be entitled to.
Tax, math and numbers are not my strong-point so this is not gospel
Thank you, John for the information! I have not received anything from my school yet (tax statement) - but my school seems to be quite disorganized with these kinds of legal matters…
Your reply and sites helped alot! THANKS!
Sonya
When it comes time for you to leave or you hit a big cash crisis in between jobs and you worked over 183 days and paid 20% you can get an emergency tax refund, in cash. The legal rate after 6 months is 10% and as far as I can make out you are entitled to a refund based on a 6% tax rate for the entire year.
For the emergency tax rebate it takes about 5 days to process and must be collected in person.
You msut sign a document stating that you only apply for one of these every 5 years and you need somebody to guarantor on the amount.
Actually I heard of people just getting it every year and signing that form, it’s just to stop every foreigner in Taiwan rushing to the office at the end of the tax year.
Thanks Haobana for replying!
I asked my boss about my tax statement…and he said he will look into it (he does not know about this more than I do - he is a foreigner too). At least, if they still want to tax me at 20%, I have the “comfort” that I can/will be getting alot of it back when I leave in September.
Thanks for all your help!
Sonya
Sorry, but another tax question…
I started in late Sept. 2001 at my job, and didn’t get my ARC for another good month and a half. They started taking off 20% after my ARC was issued. They said that will happen for six months. the other day they gave me my tax withholding papers, now should I file those ones right now for my taxes of 2001? if so how long do I have to do it? or should I just wait another year and file them then? I’ll be here for at least 2 years. Thanks for any help! …*day
Taxes for 2001 should be filed during the month of May. That begins Wednesday, May 1, 2002.
Yeah you should file those taxes too, but when I filed my 2001 taxes a few weeks ago, they sort of noticed that I hadn’t filed for the 4 months I was working in 2000. Uh-oh, I thought, they’re going to be say “You didn’t file taxes, penalty penalty, bad boy!”, but they just said “Oh, you should file these you’ll get more money back” - It was quite a lot more too!
Q: I was temporarily transferred out of country for 5 months and was paid and taxed overseas but my company channeled a pittance into my Taiwan account so I wouldn’t loose my resident tax status.
Before the pittance was deposited into my account here they 扣ed the 勞保 and 建保 from what would have been my usual salary .
Will the gov. return that? I’m trying to keep the accounting dept honest. I don’t want to keep those squirrely bastards in betel nuts all year just cuz I’m a silly little foreigner.