# Is the progressive difference cumulative?

hello everyone,
Could anyone help me understand how the tax system works?

If my taxable income is 2.000.000 NTD, how will I be taxed?

Will it be

0 to 370000 x 6% - 0 = 22000
370001 to 990000 x 13% - 25900 = 54700
990001 to 1980000 x 21% - 105,100 = 102800
1980001 to 2000000 x 30% - (pro rata 283300) = let’s say 4000
total tax = 184000
–> 9% average tax rate

OR
2)
2000000 x 30 % = 600000 - 283300 = 316700
–> 16% average tax rate

What I need to know is whether the progressive difference is cumulative or whether it is taken as a lump sum when you reach a particular bracket.
This is confusing as the way the tax scale is presented is that you remove the progressive difference in each scale

You’re in finance, aren’t you?

Sorry, so am I, and I can’t help either.

HG

Option No. 2.
This is the way it’s calculated:
First 370000 at 6% = 22200
990000 - 370000 at 13% = 80600
1980000 - 990000 at 21% = 207900
2000000 - 1980000 at 30% = 6000
22200 + 80600 + 207900 + 6000 = 316700
Which is the same as 2000000 at 30% - 283300

However, there is a complication:
When you start work, they take a flat rate 20% (at least) tax for the first 6 months (i.e. they overtax you). This is because you’re a dirty foreigner who’s almost certainly about to flee the country without paying the tax you owe. If they overtax you, you’ll have to claim it back at the end of the year - so they don’t care if you disappear.

thanks for the bad news… looks like i will get hit by 16% … versus the 9 % i am paying today in Singapore.

But the way they present it is very stange:
Net Income (NT\$) Rate (%) Less Progressive Difference (NT\$)
1 - 370,000 6 0
370,001 - 990,000 13 25,900
990,001 - 1,980,000 21 105,100
1,980,001 - 3,700,000 30 283,300

as is supposes you are have to remove the progressive difference at each scale.

So is 16% a reasonable percentage i should consider when going to Taiwan assuming i am getting 2M NTD?

BTW what kind of lifestyle should i expect with 2MNTD a year +/- 160K a month?

thanks

I believe you choose the appropriate entry point, not work your way up the scale, to find your tax calculation.

With 2M NTD a year, you can live VERY well. More money than I ever had in Taiwan, and I lived very comfortably and saved lots of money too.

ok clear.
from what i can read from the other posts, tax matters seem to be a very sensitive topic.
thank you for the feedbacks.