Do people in practice actually pay income basic tax (IBT) on foreign investment income such as capital gains or dividend income once they are over the IBT payment threshold or is this something which in practice does not really happen? Thank you.
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Not that many people will have a yearly profit from foreign investment income of more than 7.5 million NT$âŚ
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Good pointđ. And for those that do?
They can afford the tax
then why do taiwanese landlords try to avoid rental income tax 
In practice, people donât pay Taiwan IBT on foreign investment income. They simply donât report it.
Even if you want to report it, you can create a foreign blocker corporation and still pay no Taiwan IBT.
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Thank you. How does a âforeign blocker corporationâ work?
And is my assumption correct that if I hold foreign investment funds that receive, but do not pay out dividends, then I am not taxable anyway on these dividends since only the fund, but not I received those? Maybe the same what you mean with your blocker corporation although still have to pay tax on capital gains when selling
Most people in my circle pay the tax. If you want to minimize taxation of investment income, there are better jurisdictions than Taiwan.
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yes, but what if the corporation is in country with no capital gains tax 
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Yes, you avoid capital gains when selling the shares held by the corporation, but then you still face the problem of getting the money out of the corporation to actually use it. And then you do pay tax, donât you?
Damn, I think I chose the wrong profession. Didnât know the clown-business paid that well 
Since last year, companies in low-tax jurisdictions owned by a Taiwan resident need to be declared to the tax office.
Their income will be subject to IBT, too:
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Thank you. So is my assumption correct that if I hold foreign investment funds that receive, but do not pay out dividends (so called accumulating vs. distributing EFTs), then I am not taxable anyway on these dividends since only the fund, but not I received those? And the CFC-legislation should not matter since I only hold a very small part of the overall investment fund shares. Or do the Taiwanese tax authorities somehow assume some fictional deemed dividend distribution even though the dividends have not been distributed such as some Western countries do. Thanks.
Thatâs my understanding, too. Unrealized capital gains arenât taxed in Taiwan.
You might want to harvest some profit below the IBT threshold yearly (i.e. realize some profit and then buy again), though, in case you want to sell at a later time.
Itâs mostly only Germany doing that, I think 
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Thank you. That is very helpful. And glad that you understand the concept from Germany. At least the UK and Austria by the way also do the same âdeemed distributionâ taxation. So great that this is evidently NOT the case in Taiwan.
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Practically does not apply if the company is owned by a different foreign corporation (as opposed to a natural Taiwan tax resident).
There are many legal ways to avoid the âeffectively controlledâ rule. For example, you can restructure the ownership with different share distribution classes, and inside a high tax jurisdiction for extra legal armor.
But this kind of thing is not really worth it for single-digit million investment amounts.
