I’m fine with paying taxes since I’m an American and have to pay taxes anyways, may as well pay it to Taiwan and then claim foreign income credits. I don’t save any tax by tax dodging since the gold card has the 50% deduction scheme over 100k.
But almost everyone I deal with in Taiwan seem to do what they can to avoid taxes illegally, I would say it’s part of their upbringing and culture.
My landlords never want to pay any tax. I hired two local contractor and they want to be paid in cash so they don’t have to pay tax and only have to pay the lowest tier medical insurance fees since it’s based on salary.
My first employee who is out of college doesn’t even know how taxes work (I had to educate him to invest early and that there’s a high capital gain deductible in Taiwan), yet he knows that he doesn’t want to pay tax on his salary, I wonder where he got that from since it’s his first job?
I don’t know anyone paying taxes on their crypto gains in Taiwan, even when their gains are over the deductible for capital gains. They are not even reporting it.
Investors and the wealthier people I know in Taiwan have offshore structures to avoid tax legally, and the government doesn’t close such loopholes.
I would say the situation is much better than a few years ago when Taiwan was blacklisted as a tax haven, but there’s still a long way to go. It’s almost like the culture teaches you to tax dodge if you are smart.
See. The funny thing is that income taxes are very low. But there is a VAT and duties which add up to a hefty amount. Also, the amounts paid for NHI and worker’s compensation scheme.
When you take into consideration all taxes The average tax rate paid in Taiwan is 15% to 18% just like in America and the rest of the western world. (I should clarify. The average tax rate after all taxes and deductibles are applied to income.) People seem to try and dodge income tax but are happy to pay VAT and duties. So in the end they pay about what they would otherwise.
Also consider the very generous income tax deductions and tax free amount for income. These mean that very few people end up paying tax on income and just pay VAT and duties anyway.
So, tax avoidance is a very human thing. It is unfortunately very hard to avoid paying all taxes however.
Half your income above 3 million is excluded for tax purposes. It’s not taxed at 50%. Highest you will pay is something like 30% if you make 30 million nt a year
Yes, of course there is. The only way you can get East Asians to pay tax is to have a fierce tax regime that demands compliance. The funniest thing is to get ABTs that are all for Biden/Sanders but hate paying ‘stupid taxes’ in Taiwan. At least Trump is consistent about it. Next question?
Good point re: capital gains. People don’t understand that this makes Taiwan/NTD denominated securities extremely competitive if you are a resident.
I’m okay with some taxes, but I have yet to hear a reasonable argument for income tax which makes it something other than theft. Saying it is necessary to justify it is like saying the how else can the robber live, they have to steal.
Wasn’t there a tax budget surplus or something last year and Tsai handed out a bunch of the surplus to lower income individuals? Can’t seem to find news now but if budget is fine then there’s no pressing need to do anything about the evasion.
Nobody in Taiwan officially makes above 3 million NT a year. If they do they’ll have accountants who makes sure he gets taxed as little as possible. (that means officially they’re poor as a pauper but realistically they’re stinking rich).
I think this is one reason why income tax here is so low or not even enforced. Why bother when they can get it back through VAT? It’s much harder to dodge those.
When tax evaders are “caught” by tax auditors a deal is made and the tax evader might only pay 30 - 40% of the tax bill. However, the tax auditors sometimes are seeing a version of sales/income that are not the real numbers. I mean the tax evader keeps many sales off the official records which is what is reviewed by tax auditors. So actually they only report 50% of their sales and then try to pay as little as possible on the 50%. Even if “caught” they are actually paying a small amount of the tax owed after the deal with the auditors.
