A friend of mine has been in Taiwan almost as long as I, but he worked for two different companies. The second company decided to pay his tax now, which isn’t too much of a problem, but the first company he worked for didn’t provide and ARC and didn’t pay tax for him. He was paid offshore and given an allowance here and the tax office is saying well you never paid tax and we know you worked he based on your passport entry and reentry.
He is speaking to a lawyer at the moment which I think is pretty dodgy. I sugested that he get a fake invoice made up by the original company stating his allowance here during that time, and then he should just pay tax on it. Is this a viable option? There is no way to trace his financial transactions, but wouldn’t it be just easier to pay tax on his allowance?
Is there anything I should know about this situation or how to resolve it in the easiest way possible. Its restricting him from getting his ARC renewed.
It seems to me the best way is to be honest with the tax office.
Tell the people at the tax office what dates you worked, how much you received in salary, etc.
Also state that the company told you that they would take care of all the details, … etc.
Hence, you were unaware that taxes were not being paid. Whatever the tax bill is now, you will be glad to settle it, and then to contact the company on your own time and try to get it straightened out with them.
In my experience, this is the best method for dealing with the tax office.
Kind of assumes that A) that is an affordable sum of money, and B) your old employer will stump up. I would say bad advice.
My advice would be to claim he was here looking at business opportunities and after a lot of research could not get anything off of the ground. This was of course done using his own savings and some small allowances from his old firm for consultancy.
Well the first ‘company’ he worked for isn’t registered in Taiwan. Its since been shut down and was in fact a branch of a western company. It was basically a consulting office.
I agree with Edgar Allen. The tax office will do anything to try to get him to admit that he worked here, but there is no way that they can prove it. Just because he was living in Taiwan, that doesn’t necessarily mean he was working here.
Unfortunately now the onus is now on him to give some legitimate reason for being in Taiwan all that time without a job. Edgar Allen gives a very plausible scenario, and I’d definitely go with some explanation like that. The tax office may ask for some documentation to corroborate his story, but I’m sure if he’s a smart guy he can come up with something.
Tax Office probably doesn’t have to prove anything. The burden of proof is likely to be on the resident taxpayer. Things might have changed, but when I was a student they used to assess people as having earnt 20k a month if they couldn’t prove their income from abroad.
If you’re not legally a resident, nor are you working, then surely you aren’t a resident taxpayer though. They may assume that a person is working while here, but if one has a legitimate story and some paperwork to back that story up, then they’ll accept it. That’s been my experience, anyway.
They tried to pin that on me some many years ago but I stuck to my story that I hadn’t worked and didn’t make any money … 0, zip, nothing … the lady behind the counter kept repeting I should put a figure on the document other than 0 … she got angry but after a while she stopt bothering me and I was ‘free’ to go …
well when u stay in the country for 6 months fly-in fly-out then they’re hardly going to believe that you didn’t earn anything. I’m starting to think its best that he tells them he was consulting (like business trips), and pay tax on say $60k /month… a believable figure.
The tax office doesn’t care about your working status, they just care about collecting taxes. Besides, technically he wasn’t working, he was providing temporary consulting services.
Anyways … Someone I knew many years ago was slammed with a 5,000 NT$ tax payment eventhough he didn’t ‘work’ … they said it was for usage of all of Taiwan’s infrastructure … go figure
[quote=“belgian pie”]Providing a service is not working?
Anyways … Someone I knew many years ago was slammed with a 5,000 NT$ tax payment eventhough he didn’t ‘work’ … they said it was for usage of all of Taiwan’s infrastructure … go figure[/quote]
That sounds like bribery money. Anyway, regardless of whether he had a business visa or not, I think he’s looking to pay his way out of this one. The concern is not the money at all, its getting the ARC renewed.
According to the tax laws, you are considered a resident for tax purposes if you are present for any reason in Taiwan for at least 183 days in a calendar year. Whether that is on visa-free entry, visitor visa or ARC doesn’t make one bit of difference.