That simplifies the supply-chain mgmt a bit then. 
You still want an accountant though, thereās a lot of ways to āoptimizeā your business vs personal spending perfectly legally, but you have to do it right accounting-wise or youāll have much bigger troubles down the road.
Perhaps @Bree might be able to assistā¦
If I were you I would consider registering a local company in Taiwan and have the American company essentially pay the Taiwan company a fee for the product + shipping.
Orā¦ Just have the Taiwan company sell directly to the US customers and have a US office instead.
Either wayā¦ You still definitely need an accountant. They really donāt charge much compared to time you would spend researching yourselfā¦ and best of all! You have someone to blame for legal problems lol
Essentially you are stuck paying the greater of American tax or Taiwan tax (whichever is the highest) LOL
Iāve never felt prouder to say Iām an Aussie!
True, but a good accountant will be able to figure out how to reduce the taxable total amount to the smallest number possible.
Sure, but you wonāt be paying any more taxes than you would if you were in the US. Itās not like youāre double taxed.
Also, this only applies if you make over $120k. If you do, then youāre probably already in the top 5% of income earners in Taiwan. I donāt think Iād have to worry about that for a very long time.
Under Taiwan law you become a tax resident here based on the number of days you stay in Taiwan regardless of your visa status.
Then you need to calculate based on income in Taiwan. You company gets paid from US customer has a tax liability, then you as an employee have a separate personal income tax liability in Taiwan. Your tax obligations to the IRS are another matter. Also a quick internet search can show you tax rates in Taiwan for personal income.
How will you register the Taiwan business to a local home address?
My business address is the same and my home address as I own the property so do not need landlords permission and also the property is zoned for commercial business activity.
https://www.ntbt.gov.tw/English/multiplehtml/3f18d2625aea4187b0d90e9b929afe4c
Thatās actually technically incorrect. It is based on if you are ādomiciledā here (Under article 7) Income Tax Act - Article Content - Laws & Regulations Database of The Republic of China (Taiwan). I.e have health insurance etcā¦ However, the tax office chooses to ignore this law and imposes the 183 day a year rule. (As the tax office interprets domiciled as having household registration despite previous court ruling saying otherwise)
@Mataiou has submitted a complaint to the MOI and it is still a pending case with the Taiwan tax office monkeys stumped, avoiding questions and searching for bananas lol.
But this essentially means you could be not considered a tax resident of Taiwan in the first year depending on when you move lol and get a month or 2 free with no tax.
Or if you have a Hong Kong based Business (services only no manufacturing so wouldnāt work in your situation @gelinn ) you could spend just under 183 days in Taiwan and pay absolutely no foreign income tax and earn above the foreign income tax exclusion lol (Provided you are a dirty āalienā) - I would buy a campervan and traverse Australia for just over half the year if I were in that situation. (I wouldnāt be considered a tax resident under Aus tax laws.) - Then spend a couple of weeks in the Phillipines -to bridge the gap and ensure I am not in either country for 183 days in a year- where I would maybe date a few bar girls (provided I am single lol)
Who would do such a thing Comfy123? lol Setup a branch office of your Taiwan company overseas have customers pay to the branch office but those funds never enter Taiwan from HKā¦ tsk tsk lol No Tax in HK for overseas funds going to HK account either
I donāt know. Letās not start naming names lol. Otherwise we might ruin a good thing we got going!
I am glad these people are not American lol.
I pay 3k NT a month for my accountant. He doesnāt do much, but what he does do seems to be magic that you need a PhD to understand. He actually does have a PhD too lmao.
For registering a local company, heāll more than likely also need a virtual business address (unless he has a very nice landlord or owns property) and that will be 17k+ NT per year.
I only do US taxes, but Iām officed with Mazars Taiwan. Alās team handles the tw stuff and I do the US filings. My website is on my profile. Reach out if you want. Al is vacationing in US until the end of the year, so is out of pocket for strategizing tw entity structure.
No I can do the manufacturing out of my apartment.
What are you manufacturing?
Oh. Youāll need a CPA.
Hi. Here is the CPA I recommend and use. He speaks English. Rates are reasonable.
Iām not optimistic, but I hope that eventually gets fixed and they provide a proper non-BS response.
My (possibly incorrect) understanding of living in a couple of other countries and reading their tax rules is that as soon as you move to a new country (i.e., pick up all your shit and take it to the other country, set up a home there, get a job, stop ālivingā in your previous country), you normally become ordinarily resident and domiciled in the new place and pay taxes there as normal (with allowances etc. pro-rated, of course, which makes sense).
Taiwanās rules (or rather the tax officeās interpretation of them) are just punitive. It must suck for people arriving in the second half of the year or leaving in the first half of the year to learn youāre paying several times more in taxes because you werenāt āresidentā here while you were resident here.
Iāve seen the odd story about that on Facebook, where people expect theyāre getting withheld taxes back, thenā¦ nope!
Yes but then heād be paying full US taxes which is worse. To qualify for the US Foreign Earned Income Exclusion, he needs to be a resident of a foreign country for the full tax year.
Thatās for Americansā¦ yes heās an American but I was talking about others
Why not rent a small location for manufacturing your goods? You may find that it is not allowed to use an apartment for manufacturing products or to be able to register the business at an apartment.
