The entertainment business is booming due to the pandemic and I am expecting a windfall early next year. This would place me squarely in the 40% tax bracket and we Texans absolutely hate taxes. Thus, I am considering switching from an APRC to a Gold Card for a few years. Just have no clue if that makes economic sense. I’m hoping some kind Forumosans know what the tax benefits given to Gold Card holders are.
Congratulations on the success
Sadly though, if you’ve worked in Taiwan before, particularly if you’ve worked for more than three years, you’re not eligible for the gold card tax benefit.
Makes sense. Thanks!
Does an efiling tax software automatically detect eligibility for tax issues? Any recommendations ?
Not really. It asks some basic questions, but doesn’t give a guarantee. As with pretty much all the other screens - it’s up to the filer to work it out and apply if they think they are. If in doubt, probably worth calling the tax office gold card contact. I think there was one case in the mega thread where someone thought they were eligible and the tax office disagreed and asked them to pay the difference.
Btw, what do you experienced guys do( on work ARC) ? File taxes online or in person?
Don’t pay 40%, that’s only for large corporation executives etc.
You need to incorporate, the corporate tax rate is 20%. You can then place expenses on the company and/or take it out as salary subsequent years
I’m honestly struggling a little bit with this. If the payment goes through my company, I first need to pay 5% VAT to the government and the remaining portion gets taxed at 20% (minus expenses). And then there’s more income tax (as well as laobao and jianbao payments) once the money gets paid out to me. Also, if the company makes money, you’re pretty much forced to pay out dividends (which are taxed again) or pay an additional 10% income tax if you choose to leave the money in the company.
Guess I’ll have to run some detailed calculations to see what makes most sense.
I know it probably does not make a big difference but the tax rate on retained earnings has been lowered to 5% a year or two ago.
Excellent. Good to know!
Yeah, you really need to work out the totals, and possibly talk to an accountant. If you just intend on withdrawing all the money to pay for your living expenses and personal stuff, then in most countries there’s no benefit to being incorporated. You’re still going to pay the same total tax rate in the end after the money is withdrawn from the company or used for personal purposes, but with the headache of a few extra extra steps.