Do i need to pay tax as i worked in taiwan for less than 90 days in an year?


#1

Hi All,
I have been working in taiwan since 15th nov 2016 and i am leaving taiwan on july 23rd 2018. I paid all my taxes for 2017 and 2018. As i stayed for less than 90 days in 2016, i heard that i don’t need to pay the tax. But my employer is not returning my withholding money. And he’s not providing withholding statement too. From nov 15 to dec 6th i was on bussiness visa. I got my ARC on dec 7th. So how many days will be counted for the year 2016?

Please advise me ASAP.


#2

was this money earned in taiwan (taiwan company paying into a taiwan bank account)? then yeah you have to pay taxes. on top of that, you have to pay at the 18% rate for that year.

you probably got this detail mistaken - you don’t need to pay taxes on foreign earned income (like salary you earned in the USA, paid in USD, from a US company, into a US bank account) if you are in taiwan less than 90 days.


#3

If you go ask the tax bureau the answer is YES fork it over.

If you worked in Taiwan you owe tax at 18pct until after 183 days past within the calendar year of being on Taiwan.

If they don’t catch you…well they didn’t catch you. Catch you next time.

In your case your employer is keeping the withholding money and not giving you a receipt.
And you are at the same place where you received and reported income for two years.

I’m betting the tax office will have questions.

If they withhold tax from your pay they need to give you a receipt.

Tell them you plan to visit the tax office before you leave.

Sounds fishy.


#4

You always need to pay tax even if you work only 1 day. That said if you file taxes you might get taxes returned for not hitting the taxable bracket.


#5

Iirc there’s no refund if you’re not claiming any exemption or deduction (the typical -183 day scenario), except for any month in which your income was low enough to qualify for the 6% rate instead of the 18% rate.


#6

This advice is nonsense.

The country of incorporation of your employer or the country in which you hold your bank accounts is not what determines if the income is sourced from within Taiwan. What matters is where the work was done, was it done in Taiwan or somewhere else.


#7

you are absolutely wrong and you should study up this before saying anything. if you are in taiwan less htan 90 days, any money you earned from a foreign employer is not taxed, in fact you don’t even have to file. if you make money in taiwan from a taiwan employer, they must withhold however. so if my us employer is paying me us salary in a us bank account and i’m in taiwan less than 90 days, i don’t file nor pay taxes. if i exceed that, i am in fact supposed to file for that income because i am considered to have worked in taiwan and therefore that work should be taxed. any income sourced in taiwan must be withheld however.

if you are saying this doesn’t matter, you are 100% wrong. if you are arguing what counts as a “foreign employer”, then i’m not totally sure legally what counts, but practically, if you are getting paid income in another country (i.e. no money comes from a taiwan company based in taiwan to any taiwan bank account), then that would count, as it would not be withheld, and you are not obligated to file, therefore it is tax free.

https://investtaiwan.nat.gov.tw/showPage?lang=eng&search=56

Tax on Non-Residents

If an expatriate stays in Taiwan for less than 90 days in a calendar year, compensation received from a foreign employer is exempt from Taiwan income tax (if expatriates’ residence state has an applicable treaty with Taiwan, generally the criteria could be prolonged to 183 days).


#8

Well, as I wrote in my last comment as well, the state of incorporation of your employer and the location of your bank account is not what determines if your income(if any) is sourced in Taiwan.


#9

I never said it did and you clearly didn’t understand what I was saying. I merely gave an example of what a foreign employer might be. In my example someone getting paid by a US employer into US bank accounts wouldn’t get taxed. My example is complete correct yet you mentioned something either irrelevant or wrong. I never said this was the only criteria, it was just an example.

You really didn’t know about this expat exemption because it has nothing to do with where the work was actually done. My US company sends me to Taiwan for two and a half months to work in Taiwan, all the work is done in Taiwan - do I owe taxes? By your definition yes by you are wrong.


#10

The OP stated he received his ARC December 7th, so he would be a resident of Taiwan starting December 7th(or perhaps even a few days earlier as you dont receive your ARC immediately when your resident visa is activated). The OP needs to pay tax on this income if the work is done in taiwan, irrespective of if the employer is a US incorporated entity and/or the bank account is located in the US.

Now, had the OP not been a resident of Taiwan, the situation would be different(as was the case when he was on a business visa)


#11

this is again not correct, although this is starting to get beyond my own scope of knowledge. having an arc does not make you a resident and does not change your tax calculations.

you are a non-resident if you are in taiwan under 183 days - this is a big reason why many people on this forum try very hard to hit 183 so their tax withholding goes down.

now that we know OP is not a resident, then this would be true:

  1. Non-R.O.C. residents who stay in the R.O.C. over 90 days within a taxable year, remunerations paid by employers outside the R.O.C. for services rendered in the R.O.C. shall be filed and taxed at the rate of 18%.

so pay attention to this. this is saying if he happens to be here over 90 days, he owes taxes (and should file) on any money he made from a foreign employer. if he’s here LESS than 90 days, he doesn’t.

look, i was trying to explain to him why he thought that less than 90 days = no tax. because he was confused with the exemption for income from foreign employers. a lot of people get this confused, because they hear ‘hey if i’m here less than 90, i don’t owe taxes right?’ no, you don’t owe taxes on money you made outside taiwan, but any money you made in taiwan is withheld like normal and taxed like normal. OP was making money in taiwan from a taiwan employer, so this less htan 90 days thing does not apply to him.


#12

This is correct, your ARC in itself does not make you a resident. But, its pretty obvious the OP was a resident starting sometime around early december then his resident visa kicked in. He continue to reside in Taiwan 2017, 2018 so there is no reason to believe he didn’t have domicile in taiwan since early december 2016.

Most people would become residents the day they enter Taiwan on their resident visa and activate it(or convert their tourist visa to a resident visa).

And you are right, this discussion is outside somewhat of what the OP was asking, but the fact of the matter is that residents of taiwan need to pay tax on all income earned in Taiwan(irrespective of the domicile of the employer or the location of the bank account in which the payment was made)


#13

OP was specifically asking about 2016 when he first got here. He got here nov 2016, and obviously was a non-resident for 2016 (less than 90 days). his question was specifically on why his money was withheld in 2016 (not 2017 or 2018, which like you said, he was a full resident, and as such everything else you said is true). remember, residency is on a per-tax year basis, so it doesn’t go backwards in time to the previous year. jan 1 to dec 31 is all that matters.

but he was specifically asking about why he was withheld and taxed in 2016, because he (incorrectly) thought that by being in taiwan less than 90 days during the 2016 tax year, he should not have been taxed.

i was explaining to him why he thought that. it was because he read about the less than 90 day foreign employer exemption and thought that it applied to all income. and i was saying ‘you probably got confused about that, the less than 90 days tax exemption only applies to income you made from a foreign employer, not money you made in taiwan from a taiwan employer’. everyone else answered about how he owes taxes for 2016 - i wanted to explain why he had that mistaken idea about < 90 days being special (because it is, for foreign employer income).

this 90 day exemption means that someone can work in taiwan for 89 days but not be taxed if their employer and income are foreign (like a US company paying into a us bank account, but sending an employee to taiwan to work for 89 days). it ALSO means though that if i take a sabbatical and just chill in taiwan for 100 days (no working), then taiwan will expect me to file taxes for that tax year, and well at this point they will want a prorated cut of my annual income, or i’ll have to convince them that i wasn’t working, but either way, this will be extremely messy.


#14

Thanks for your inputs. I went to IT office, i was told i need to pay tax for complete stay in 2016. Here’s the problem, my employer is not giving me the withholding statement. Infact he wants to steal the withholding money. I don’t want my money to be misused. When i told the same to the IT guys,they’re not really serious about it,I was even told by them that its fine even if you don’t pay as I had paid for next 2 years. :rofl:.
Finally, i don’t want to abuse the process. I want to pay the tax. But the catch is ,my boss(taiwanese) is threatening me that “i will show your income which includes deductions (health insurance and labor insurance and some additional pay which increases by 60k NTD)” . Can he really overshow the salary in withhold statement ? I feel those shouldn’t be taxable even if its in the case of 90 days(?)
I showed my salary slips to them ,but those are not enough to pay tax. Ufffff.

Mixed feelings !


#15

lots of small taiwan “companies” make a national sport out of “avoiding taxes”. you actually did not need to file for 2016 as you were in taiwan less than 90 days. your boss was supposed to withhold and pay the taxes for you (at the 18% rate) and that would have satisfied everything. your boss might have decided that ‘hey i can withhold 18% but just keep it! muahahahaha! i’m so smrt!’ which i’ve heard happens.

the tax office people aren’t really going to want to pursue this as it’s ma fan and the amount of money is going to be small. they could go after your boss, but that’s work for them! your boss knows he committed a no-no so will want to threaten you to just keep quiet, as he knows that he can get away with this. quite a few small companies do this by the way, where they highly fudge numbers so they screw the tax office and the workerbee. just search this forum and you’ll see plenty of horror stories!


#16

A post was merged into an existing topic: A completely useless thread


#17

Hi Endy, do you have a link to the official definition of “Taiwan source income”?


#18

I’m a little confused about the nature of this threat. Do you mean he’s threatening to overreport your salary instead of underreporting it (at zero) like he was before?

Even if you don’t have tax withholding receipts, you should have pay slips. At the very least, you have your bank records to prove how much you’ve been paid, or receipts if you get paid in cash. You can’t get in trouble for your boss breaking the law, unless you agree to go along with it.

Just tell the tax office how much you really earn and that your boss is cheating. Whether or not it’s worth their time is up to them (not grumpy forum members :wink:). You’re probably just the tip of the iceberg at the company anyway.

Tell the labor and health insurance offices too – your boss is liable for more than the missing premiums – and feel free to talk to the labor department as well.

It can be a headache, but it’s best to make sure your affairs are in order.


#19

all those links i tossed should have the tax definition. like:

i think a big part of the confusion in this is because working in taiwan while on business trip or something is technically taiwan sourced income, so a lot of people including that other guy think this is all taxable, because it is taiwan sourced income (the work was done in taiwan!). but it clearly states in many areas that it isn’t if you are under 90 days:

(3) Remunerations for services rendered by an individual within the R.O.C. and income derived from employer(s) outside the R.O.C. for services rendered in the R.O.C.for those who have stayed in the R.O.C. over 90 days within one taxable year.

It is taiwan sourced income, but it is not taxed if the non-resident is in taiwan not more than 90 days.

  1. Determination of income
    For an alien who remains in the R.O.C. within one taxable year:
    (1) Not more than 90 days:
    A. The income tax shall be withheld at the income sources or declared and taxed in accordance with the withholding rate.
    B. The income tax shall be exempted for income derived from employer(s) outside the R.O.C.

now the real question i guess you want to ask is what is a ‘foreign employer’. i don’t know of any legal tax definition, but it might tie in to what foreign sourced income is, which is a foreign enterprise that has no fixed place of business in taiwan, or if it does, then you did not work for that division of sorts but in the division in the foreign country. i think ultimately if you are getting paid in a foreign currency from money sources based in that foreign country, then it probably would count as a foreign employer. the key point is, since it doesn’t transit taiwan at all (the foreign company’s US bank sends money to your us bank account), taiwan cannot withhold anything. as you don’t even have to file under 90 days, practically speaking, this money cannot be taxed.


#20

That sounds logical. :slight_smile: