How to pay less taxes

Dear Forum Seniors,

I am currently an expat living in Taipei.

Last year, I paid 40% in taxes and am seeking options to lower this payment.

Any suggestions? I am on a ARC and my salary is paid overseas. I dont receive payments in Taiwan.

To clarify, you mean you paid 40% in taxes to Taiwan, right?

I’m guessing he means combined, since the top rate in Taiwan AFAIK is 30%.

It actually is 40% if someone makes over 4+M NT. Of course at that a US citizen (maybe the OP) is also paying US taxes.

But the OP would have to post significantly more info if he wanted helpful advice. Without knowing the country(ies) that are collecting the tax, the income, the businesses he might own and other personal info there is no advice other than make less money if you want to pay less taxes. The other way would be to become a pathological liar on your tax return like the typical Taiwanese business but those recommendations aren’t allowed on here. Of course hiring a tax consultant would probably be the best move since you must be paying a ridiculous amount in taxes if you are in the top tax bracket.

Hi Hokwongwei, Yes, Taiwan taxes only.

It actually is 40% if someone makes over 4+M NT. Of course at that a US citizen (maybe the OP) is also paying US taxes.

But the OP would have to post significantly more info if he wanted helpful advice. Without knowing the country(ies) that are collecting the tax, the income, the businesses he might own and other personal info there is no advice other than make less money if you want to pay less taxes. The other way would be to become a pathological liar on your tax return like the typical Taiwanese business but those recommendations aren’t allowed on here. Of course hiring a tax consultant would probably be the best move since you must be paying a ridiculous amount in taxes if you are in the top tax bracket.[/quote]

HI Abacus,

I work for an Australian company and my salary is paid directly into my Australian bank account only. I dont receive any compensation in Taiwan except my expenditures such as food, lodging, transport, entertainment etc…

I did think of hiring a local tax consultant but before doing so, i am doing some homework of my own.

Please advice.

Plenty of views and no one has any opinions?

Sincerely, it is a bit above our pay grade.

I’m not really sure what you can do and I don’t have (most don’t in Taiwan) experience making a shitload of money in Taiwan. In the US you could open IRA’s but I don’t know if they exist here. Property is a good way to avoid taxes but I wouldn’t buy anything in Taiwan. You don’t own a business so you can’t even make a bunch of bullshit tax deductions. There are likely some small things that can be done but most ways to avoid taxes are illegal although Taiwan is terrible at accounting.

Page 39-41 of the tax code list the items that can be deducted from your taxable income. It doesn’t seem like there is a lot there since your company pays for your housing. pwc.tw/en_tw/tw/publications … k-2011.pdf

If you’re paying 40% your income is about 8-10 times greater than the Taiwan average. Even in Australia you’re at about 3x the median salary. I don’t think 40% is too much to contribute when you’re already a high income earner.

Not to mention it’s not actually 40%, just 40% on whatever is over 4.2 million. Over all might be closer to 25% (assuming an income of 5 million).

You should get paid into a 3rd country with flexible banking and residency laws like HK or Singapore. You can operate these accounts online.

That way you can avoid many issues with both Taiwan and Australia.

Then if you are resident in Taiwan you should declare your income fully or partially.

It’s up to you as to be fully compliant or not. Not being fully compliant is illegal, we can’t recommend illegal activities here even if they are commonly pursued.

If you donate to charities and non-profit organizations, you can get tax deductable receipts. Life insurance payment is also tax deductable.

Thanks… 40% is too much of a contribution.

Thanks Incubus, I donated over NT$400K to charities and religious organisations last FY and got a small tax relief.

I like your suggestions re life insurance, I will check out that option! Thanks for your advice.

[quote=“headhonchoII”]You should get paid into a 3rd country with flexible banking and residency laws like HK or Singapore. You can operate these accounts online.

That way you can avoid many issues with both Taiwan and Australia.

Then if you are resident in Taiwan you should declare your income fully or partially.

It’s up to you as to be fully compliant or not. Not being fully compliant is illegal, we can’t recommend illegal activities here even if they are commonly pursued.[/quote]

Hi headhoncholl, I am paid in Australia and luckily, Australia does not have global taxation laws. I am only subjected to Taiwan taxes.

Unfortunately, i have to comply with the local taxation laws here and seeking the other is not an option…

Not to mention it’s not actually 40%, just 40% on whatever is over 4.2 million. Over all might be closer to 25% (assuming an income of 5 million).[/quote]

Hi silly.putty, you are 100% correct in your calculations. I am very close to the 40% line overall.

Then you must make a huge fortune then. At least 25 million a year. Top 1% should pay their taxes.

Yeah, somebody’s gotta pay for your healthcare, and of course it shouldn’t be you.

Thanks Incubus, I donated over NT$400K to charities and religious organisations last FY and got a small tax relief.

I like your suggestions re life insurance, I will check out that option! Thanks for your advice.[/quote]

Life insurance is only tax deductible for something like the first 30k you pay per year. The rest of it is still taxable.