I am a Taiwanese citizen about to move there for the first time after living my whole life abroad. I will be working online in Taiwan as a self-employed independent contractor for clients based in the US. My question is will I need to register a business or otherwise set up some kind of legal business entity there to be able to do that?
My second question is will I have any trouble opening a Taiwan bank account as a self-employed consultant without an employer or company or verifiable paystubs?
yes, if you want to work legally, issue invoices, claim tax deductions and file taxes you will have to register a business here.
people have done it without registering a business, but its illegal and if you get caught you should be able to bear the consequences.
if you are a citizen it won’t be a problem to open a bank account. without a credit history or a deposit you won’t be able to get credit or loans, but other banking services are not a problem.
In what sense is this illegal, if the person has open work rights/citizenship? Is it that there’s an income limit above which someone needs to register a business, something like that?
Having the right to work does not negate the duty to pay taxes on income generated from your business.
it’s not unique to Taiwan, in most countries I’ve worked in you don’t just open a business and keep the money, the tax man gets his cut.
best is to consult with an accountant on what is the best way to open this business.
Yes, sure, but I’m not referring to evading taxes here. For a self-employed person with overseas clients, what’s to stop them working as normal and filing taxes in May with everyone else, without opening a business? Are you saying that that’s illegal?
Article 3
The definition of sale of goods is the transfer of ownership of goods to others for a consideration.
The definition of sale of services is the supply of services to others or the provision of goods for the use of others for a consideration with the exception of professional services offered by practitioners and services rendered by individuals in employment.
Article 5
The following small-sized businesses shall be exempted from registration in accordance with this Act:
Vendors. (攤販)
Family agriculture, forestry, fishery, animal husbandry businesses.
Family handiwork businesses.
Lodging businesses.
Businesses who’s amount of sales per month does not reach the minimum taxable sales.
The small-sized businesses referred to in item 2 and Item 3 of the preceding paragraph shall be limited to businesses operated by himself/herself or mainly operated by himself/herself although some employees are hired in such business.
Chapter 2 Scope of Reduction and Exemption Article 7 The business tax rate is zero for sale of the following goods or services:
Exported goods.
Services relating to export or services provided in the R.O.C. but used in a foreign country.
Doesn’t that suggest that services provided exclusively overseas are exempt? (I don’t know how that relates to the other questions and the need to form a company, though.)
You can register a business, it isn’t hard but as far as I know the tax office may send you a memo if you don’t but once you register they really don’t care. It only happens if there’s noise complaint or something.
If you make less than 100,000nt per month then you won’t need to make a fapiao. You’ll get a big yellow sticker saying you don’t need that…
Worst thing in Taiwan is you pay what the taxman thinks you owe. This isn’t America, and people evade taxes all the time. Even in America IRS don’t go jailing you for stuff, they just tell you how much they think you owe and you pay it, and that’s that.
Probably not applicable to OP but certain businesses, like food/drink/coffee shop will require fapiao no matter what and registration with the health department.
Otherwise for self employment the regulation is largely none. Only bad is that you don’t have laobao protection… as 99% of all government assistance in Taiwan is tied to laobao.
Ah I was afraid of that. Here in the US I can legally sell my services as a private individual without starting a company (and pay taxes as a private individual as “miscellaneous earned income”), so I’ve never had the experience of registering one.
How much I make will depend on how much work I get, but I usually make around US$6,000 a month. So are you saying there is an income limit that determines whether I’ll need to register as a business?
So if my business tax rate is zero (because I’ll be providing my services exclusively to foreign companies) what does that mean? I won’t need to pay any taxes at all? Or will I still need to pay income tax from the sale of my services as a private individual?
No idea - you’re asking the wrong person haha. There are experts in this thread, but I’m not one of them. I’m just in a similar situation as you, but don’t know the answer either.
I’m just in a similar situation as you, but don’t know the answer either.