Should the company withhold taxes at 20% or 10%?
Also I haven’t gotten my ARC yet… it’s in the works.
Taxes are withheld at 20% for your first 183 days in Taiwan, regardless of hire date. However, if the year ends on 12/31 and you have not reached the 183 days at 20%, you start over at 1 day on Jan. 1st.
In full consideration of Article 7 of the Income Tax Law, I concur with the analysis of IamtheWalrus.
Isn’t this regulation against the national treatment principle of the WTO?
It depends on how it is applied.
According to the tax law, if you have Taiwan source income, you should pay Taiwan income taxes. It doesn’t matter what your nationality is.
Over 183 days physically present in Taiwan during the year (or more), then you are entitled to the “resident” withholding rate, and you can carry that status into the next year. It doesn’t matter how many times to switch jobs . . . . . your 183 days (or more) of physical presence is calculated based on your number of days of physical presence.
However, if the accounting people at some organization ask that you prove you are entitled to the “resident” withholding rate (by showing entry and exit records, etc.), and don’t ask local Taiwanese citizens to prove that they are entitled to the “resident” withholding rate, then yes I would say that that violates the “national treatment” rules of the WTO.
But the fact that foreigners have to fulfill a residency requirement seems unfair somehow. I wish I could find a way to use the WTO rules against them. Think of all the laborers out there that have to pay 20% taxes at the beginning of their stint here… I’ve been here 10 years, so it doesn’t affect me. It’s just the principle that bothers me…