A friend of mine who works in Tokyo, told me about this story. Seems that IBM Japan staff were hit with dual taxation in connection with Taiwan.
Does this also happen with workers from other countries who come here?
Here’s the story:
About 110 IBM Japan employees were taxed twice on income they earned during business trips to Taiwan between 1999 and 2002, being forced to make payments in both Taiwan and Japan.
Taiwan law requires foreigners to pay taxes if they stay in the country for more than 90 days during the financial year.
… the company was told by the Taiwan tax authorities of their employees’ failure to pay taxes for the years 1999 and 2000, after which it paid arrears of 100 million yen, including for 2002, on the employees’ behalf.
The employees then asked the tax authorities in Japan to grant them income tax deductions equivalent to these payments.
However, their request was turned down on the ground that there was a “lack of appropriate procedures.”
During this period, the employees had been paying income tax in Japan, meaning they were subject to dual taxation.
Japan has signed mutual tax treaties covering the treatment of firms and individuals making short stays in other countries with 55 nations, including the United States and China. Under the agreement, individuals on stays not exceeding 183 days within a single financial year need not pay taxes abroad.
Japan does not have any such agreement with Taiwan, however.
