According to Article 73 of the Income Tax Act of the Republic of China, the tax withholder shall withhold the income tax payable in accordance with prescribed withholding tax rates for a non-resident* who has income within the territory of the Republic of China. In addition, according to Ministry of Finance regulation, every foreigner’s residence period must be reviewed annually.
To comply with above regulation, effective 01Jan2009, HSBC, the tax withholder, will treat all foreigners as non-resident from the beginning of every year and must withhold 20%** of any interest payment made to a non-resident foreigner.
If you want to change the withholding tax rate to 10% as a resident while you have resided within the territory of the Republic of China for a period of more than 183 days during a taxable year, please contact HSBC Direct service team for assistance. Thank you for your cooperation!
*Non-resident is subject to a person who has no domicile within the territory of the Republic of China and resides within the territory of the Republic of China for a period of less than 183 days during a taxable year.
**According to “The Standards of Withholding Rates for Various Incomes”, current withholding tax rate for interest payment of non-resident is 20%.
I’ve been a resident for a fairly long time, and this doesn’t sit so well with me. I’ve already contacted customer service, and am waiting for their response. What gives?
HSBC Taiwan are a bunch of racist, useless clowns. They once issued me a credit card with five days validity. One utter pig of a manager actually laughed at me down the phone.
I’ve been reading that payroll taxes are to be handled this way from now on, too.
I’m still trying to get a definitive answer, but TLI received a notification from the government that they’re interpreting in a similar way to HSBC’s new procedures for handling taxes: For the first 6 months EACH YEAR, they are to tax at 20%. After 6 months, they can tax at 6%. You get the difference back when you file taxes. In the past, it was only the first year we’re here, but these changes may mean that it will be every tax year.
According to articles 7 and 73 of R.O.C. Income Tax Law, foreign individuals residing within the boundaries of The Republic of China for fewer than 183 days in a given tax year (1/1 – 12/31) will be assessed a tax rate of 20% of their income. Foreigners residing in Taiwan for more than 183 days in a given tax year will be taxed at the same rate as Taiwanese nationals who fall into the same tax bracket based on salary. This means that if your contract runs from August 1, 2008 until July 31, 2009, for example, from August until December 31 your taxes will be assessed at the same rate as Taiwanese people in your tax bracket. However, from January 1 until July 2 of the new year you will be taxed at the rate of 20%. (The difference between that number (20%) and the percentage you will be taxed based on your bracket will be refunded to you when you prepare you taxes in May of the following year.) [/quote]
yes we’ve been discussing this on another thread somewhere else . it does seem to be the case that from this month many people will be taxed 20% for the first 6 months…
So this means that all foreigners now get taxed at 20% for half the year and don’t get the money back until the following year? What happens if I file my taxes along with the wife, which is what we’ve been doing for years?
And what if you go on holiday during the first 183 days? Will the tax office then rule that you’ve not been in the country long enough and have to pay the full 20%?
I’m planning a trip home early next year, so this is important to me.
[quote=“sandman”]And what if you go on holiday during the first 183 days? Will the tax office then rule that you’ve not been in the country long enough and have to pay the full 20%?
I’m planning a trip home early next year, so this is important to me.[/quote]
No, I don’t think so, but your employer will have to withhold 20% for the first 183 days that you ARE in the country*. Whether those days are all consecutive doesn’t matter.
The whole thing seems incredibly stupid to me. I’m glad my company is officially based in HK, so there is no withholding and I just pay my tax when I file.
[quote=“Brendon”]No, I don’t think so, but your employer will have to withhold 20% for the first 183 days that you ARE in the country*. Whether those days are all consecutive doesn’t matter.
*: Every. Year. What?[/quote]
This is what kills me. Every year.
So yeah, technically whether you have been here 1 year or 10 years, if in a given calendar year we are here less than 183 days in that particular year, our tax rate is 20%. They’ve been assuming that if we were here for 1 full year, we will probably be here for the next full year. They must have discovered that is not necessarily the case.
Hi Sandman: The good thing about the JFRV is that there is no 183-day period proviso and you are part of the wife’s hukou, so I’d say this new tax code thingy probably won’t apply to hitched up guys like you and me. This new thing is probably just a way to get more taxes from people who are here for a year and a bit, only pay 10% on the months fewer than six that they are here on their second year - based on last year’s tax calculation - and then take off. That’s my guess, at any rate.
Methinks HSBC is screwing up thier interpretation of the rule as this tax law has always existed. You always got taxed at 20% for your first tax yearas they want to ensure that you file your taxes. For the second tax year, and subsequent tax years, this ruling would not apply.
Methinks HSBC is screwing up their interpretation of the rule as this tax law has always existed. You always got taxed at 20% for your first tax yearas they want to ensure that you file your taxes. For the second tax year, and subsequent tax years, this ruling would not apply.[/quote]
incorrect…the new law is that every year is a new year (if that makes sense)…you don’t carry over your tax residency status as you did previously…you have to re-qualify for 183 days in every year…
. it does seem to be the case that from this month many people will be taxed 20% for the first 6 months…