Yeah, forced savings, sure. 
But then again, the the over balance on the 20% taxes you pay in January 2009 will be filed for in May 2010 and really only see your pocket come August/September 2010, when the tax office issues your refund cheque.
That’s more than 18 months devaluation (as in lost interest, etc). 
Maybe that’s because it’s illegal for foreigners to teach kindy in the first place…
This change is being discussed on another thread too. What is posted seems clear that there will be a refund of the extra withholding. I have been having to pay a few thousand every tax time and it was as I wanted it even though the tax office suggested I have my employer withhold at 7% instead of 6%. This simply means that I get to make an interst free loan to the Taiwan government for a year and look for my return when and if they get around to sending it.
Now, it seems they are forcing the loan. I’ll survive it but it is just one more incident of being unfairly taken advantage of, especially in these more difficult times.
While I was writing the above, my SO just came in to tell me that Taiwan has announced greater help for foreiners in Taiwan. Amazing. Bend you over and tell you they are there to help you!
JFRV = joint family RESIDENT visa
However, you’re not a resident unless you’re in Taiwan > 183 days.
Illogical, IMO. And the added rules on business will only bring Taiwan down in terms of the ease of doing business with Taiwan.
But aside from the first year of marriage when it’s optional, all spouses must file jointly. How’s that going to work?[/quote]
Do you have to file together even if you don’t have your ARC through the marriage?
I just got through to the hotline. The girl on the phone told me that your employer has a choice as to which rate they will deduct from you. She said that if I had a contract running that would see me pass the 183 days or if your laoban saw that your ARC would do the same it was then up to him or her to decide whether they, in effect, trusted you or not. If they believe that you will stay then they can deduct the regular 6% but they will be held liable if you leave the country before your 183 days are up and by some stretch of the imagination ahve incurred a massive tax bill.
Maybe I’m stupid but surely if you’re having 6% deducted every paycheck then the average joe will be covered for tax regardless of when he or she leaves. If it’s a case of your rate being too low then they should deduct the correct percentage each month.
If you are considered a non-resident under the tax law then your tax rate is a flat 20% no deductions, exemptions, etc. So if you have had only 6% deducted and left after (for example) 4 months then you will owe another 14% of your income in tax. If your employer withheld at 20% and you left after 4 months then neither you nor your employer needs to do anything more as the non-resident tax has been paid in full and you would not qualify to take any deductions or exemptions to reduce the amount. In the third case if the employer withholds at 20% and you end up staying more than 183 days then you will have probably have overpaid your taxes and be due a refund once you file. (The top tax bracket is actually higher than 20% so if you have an extremely high income you might be better off being considered a non-resident, but most of us aren’t that fortunate.)
If you are considered a non-resident under the tax law then your tax rate is a flat 20% no deductions, exemptions, etc. So if you have had only 6% deducted and left after (for example) 4 months then you will owe another 14% of your income in tax. If your employer withheld at 20% and you left after 4 months then neither you nor your employer needs to do anything more as the non-resident tax has been paid in full and you would not qualify to take any deductions or exemptions to reduce the amount. In the third case if the employer withholds at 20% and you end up staying more than 183 days then you will have probably have overpaid your taxes and be due a refund once you file. (The top tax bracket is actually higher than 20% so if you have an extremely high income you might be better off being considered a non-resident, but most of us aren’t that fortunate.)[/quote]
The part that gets me is that if you are a non-resident under the law, why does it say “RESIDENT” on your ARC? Hats off to anyone who answers…
The part that gets me is that if you are a non-resident under the law, why does it say “RESIDENT” on your ARC? Hats off to anyone who answers…[/quote]
Tax law and immigration law have different definitions of resident.
Maybe that’s because it’s illegal for foreigners to teach kindy in the first place…[/quote]
This was way way back before they outlawed it.
[quote=“jlick”][quote=“twocs”]
The part that gets me is that if you are a non-resident under the law, why does it say “RESIDENT” on your ARC? Hats off to anyone who answers…[/quote]
Tax law and immigration law have different definitions of resident.[/quote]
Thanks for your response. It gave me the direction for the following:
[quote=“https://www.ntat.gov.tw/county/ntat_ch/ntat_en/ab27.jsp”]
https://www.ntat.gov.tw/county/ntat_ch/file/ab27-05.doc
5.)、Question：What is the difference between “residents of the Republic of China” and “non-residents of the Republic of China” regarding the Income Tax Act of the ROC?
Answer：The following three categories of individuals are regarded as “residents of the Republic of China”：
1、An individual who has registered residence in the Household Registration Office and frequently stays in the ROC is regarded as a ROC resident, regardless whether his or her stay in the ROC is less than 183 days.
2、 An individual who has no registered residence in the ROC but stays for 183 days or longer is regarded as a ROC resident.
Individuals not falling into the above-mentioned two categories are regarded as “non-residents of Republic of China”.[/quote]
I believe that this rule is derived directly from Article 7 of the Income Tax Act, 2008, which applies to a person with domicile in Taiwan (i.e. has registered with the Household Registration Office). Therefore, I believe that Maoman is correct to say that spouses of Taiwanese can have 6%, not 20%, deducted from their salaries as long as they have registered with the household registration office. Of course, I’m not a tax lawyer, so you don’t need to take my word for it, but I believe that this would give you the appropriate direction to argue with your employer if you met the conditions above.
Well I’ve just been hit by my first 20% and it’s not even January. needless to say I hit the roof and demanded to know why my co-worker on an APRC is exempt while me and my family visa are not!! It also sickened me that they deducted it before the law even came into effect. The official word from my school’s hierarchy was “If the foreigners don’t like it, tell them to get a job in China or Korea” Ouch!
Solicitors will be contacted!
It’s basically at your employer’s discretion. I’ve been told that since I’ve been working here for many years they’ll continue to deduct the same amount as always.
As far as I understand it, though, this means that if I leave the country before I’ve been here 183 days or whatever, the company will have to pay any outstanding tax I owe. A matter of trust, I suppose.
[quote=“irishmoe”]Well I’ve just been hit by my first 20% and it’s not even January. needless to say I hit the roof and demanded to know why my co-worker on an APRC is exempt while me and my family visa are not!! It also sickened me that they deducted it before the law even came into effect. The official word from my school’s hierarchy was “If the foreigners don’t like it, tell them to get a job in China or Korea” Ouch!
Solicitors will be contacted![/quote]
you’ll have been hit already because a new accounting year has begun…many people will get the new tax when they get paid at the end of this month since companies here use December 1st to Nov. 31 as their financial year…don’t ask me why…
i seriously wouldn’t bother talking to solicitors…remember you aren’t actually losing this money…just loaning it to the govt…it sucks i know but there is no point taking it out on HR people…
[quote=“tommy525”]Its a complex idea. But if they have you pay 20pct for the first six months then use those funds already withheld to pay for any taxes due the rest of the year you may come out ok.
Provided you can afford the 20pct cut in salary the first six months that is and still pay your bills.
It could work for some people. Lets do an exercise. Say you made 100,000nt a month for 12 months and got a 13th month as bonus at the end of the year? So on the old program say you had 6pct withheld monthly and your taxes were right about 6pct actual at the end of the year when you filed your income tax and you ended up not having to come up with more money but also not getting anything back. And it was up to you to save a portion of your annual income if you wanted to (and of course you should) and you had the 13th month as your annual bonus as you are not going to get much of a tax refund. So you had this 13th month as fun money for trips or whatever. Maybe that trip to Thailand. Thats your year.
Now under the new formula you had 20,000/month taken away each month for the first six months. This is 14,000 more per month then would have been taken under the old formula or about 467 nt/day. Not inconsequential but probably survivable considering the old formula you had about 3133/day after taxes and now have about 2667 a day. So perhaps you cant save the 10,000nt/month you were saving up under the old tax table, but this extra 14,000/month will be alleviated IF you were saving 10,000nt/month. Only IF you were, if you needed every penny of your income you are not in a good position at this point. And then the second half you had zero withheld because you have already built up a big war chest. Then you would have the full 100,000/month to work with. And at the end of the year you still got the 13th month bonus (taxes withheld at 6pct) and had the rest of your income withheld at 10pct effectively . As 20pct for the first half and nothing for the second half means 10pct for the year. And thus you could expect a 4pct refund from your taxes withheld or about 48,000nt (not counting the 13th month for which tax withheld remains the same under both formulas). This would be a nice chunk of change. So basically you now had the 13th month as fun money for the trip to Thailand as per the old formula but with the new formula enjoyed a tax holiday for the second half of the year and only had to scrimp a bit the first half but now have a forced savings of 48,000 that you could keep in the bank and/or help tide you over the "hump’’ for the lean first six months of the next year? Plus dont forget the second half of the year you have the full 100,000nt per month to work with instead of the old 94,000nt/month because you are not having any money deducted the second half? So you have 6000/month more for each month of the second half to save up with or have fun with. And thats 36,000nt.
For people who cant save money, this would help keep you in better financial health as its a free govt managed money management formula for YOU !!! Yes I should work for the govt mouthpiece 
Because if you are not a money saver by nature:
Monthly 6pct withheld equals pretty much your taxes for the year, no more needed and nothing back. Leaves you with 94,000/month to work with and a 13th month as your annual bonus to save or use on a trip. If you are not good at money management you will basically have not much left over from your work year.
48,000 refund at the end of the year (yes I know you dont actually get this until you file your taxes and get the refun in the next year)
6,000 more each month the second half of the year (but since you are not a money saver, this could end up going to more beer)
13th month bonus still taxed the same and still usable as you planned.
Actual savings possible 48,000 + 36,000 (if you didnt piss this 6000/month x 6 months away) = 84,000nt/year. Added to whatever else you save up, including perhaps your 13th month if you are miserly and only take the wildchicken bus to Kending and take a tent for your annual holiday.
At any rate, you will likely end up with at least the 48,000 that you got in one chunk. But if you use that for a new puter?? Well …at least you got that new puter you wanted. [/quote]
Except you’re loaning your money to the gov’t INTEREST FREE for about 18 months until you see your refund. Why not have exactly the right amount taken out each month and put what you don’t spend in a CD account or invest it somewhere else and receive interest income? Why should you lend the gov’t your money interest free and they turn around and lend it to someone else charging an interest? Shouldn’t you get that interest instead?
[quote=“the bear”]
you’ll have been hit already because a new accounting year has begun…many people will get the new tax when they get paid at the end of this month since companies here use December 1st to Nov. 31 as their financial year…don’t ask me why…
i seriously wouldn’t bother talking to solicitors…remember you aren’t actually losing this money…just loaning it to the govt…it sucks I know but there is no point taking it out on HR people…[/quote]
I was joking about the solicitors. And the reason I’m pissed off is because it was suggested that if I don’t like it then I should leave!!
Anyhow a new year now and a new start.
I just took a look at the new withholding forms. Last year there were two questions for the residency qualifications, first if the taxpayer had been in the country at least 183 days this year, and second asking if the taxpayer had been in the country more than 183 days the previous year. The new form (97.11 version) only has the first question. This may make it difficult for companies to opt to do the lower withholding percentage as a favor for long timers. I guess it depends how closely the withholding office looks at the forms. The one office I file at barely looks at them, just stamp stamp stamp and give back my copies. The other office always scrutinizes everything and half the time finds something to question. Last Saturday (1/10) was the last chance to file withholding for 2008, so from now on things will be interesting with this new rule.
Er, forgive me for not knowing anything. But is there a different withholding form for foreigners? I mean that it’s possible to be a non-resident Taiwanese, and I get withholding certificates in Chinese, so I assume that there’s one form for everyone.
In that case, nobody has been in the country for 183 days this year, as it is only January. A Taiwaneser who takes off in June for work, study or travel overseas would also be liable for the 20% tax. Do you have to answer the residency question for everyone, or just for foreigners?
The tax residency rules are the same for both foreigners and citizens without household registration.
For citizens with household registration it is less straightforward. Those who “regularly reside in the R.O.C” are considered residents regardless of how long they stay. Those who don’t will fall under the same rules as foreigners of needing at least 183 each calendar year. I understand there have been some recent changes in this area because they want to collect more taxes from Taiwanese on the mainland, so this may be outdated.
However, as a practical matter it is unclear what the definition of “regularly resides in the R.O.C.” means, and as a general rule businesses seldom withhold at the non-resident rate for citizens regardless of whether the person qualifies or not.
There is an article in the “Community Compass” section of the Taipei Times today. This is YET another story and it confuses me.
[quote]The change of definition has caused few problems thus far, according to the tax worker, who wished to remain anonymous.
“[color=#FF0000]The change has made little difference, as most foreign workers continue to retain their resident status as long as their working contracts state they will stay in Taiwan over 183 days in a year[/color],” he said.
Those who cannot predict how long they will stay here will have 20 percent of their income withheld by their local employers whether they like it or not.[/quote]
Since when does what your contract say now make a difference? 
Any way, the whole article is here: http://www.taipeitimes.com/News/world/archives/2009/01/20/2003434187