To HSBC banks afaik.
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I did not need to transfer funds here to get a credit card I downloaded PDF’s from my HSBC HK account
I used that to increase my credit limits on Taiwan cards. HSBC HK issued me the HSBC Premier Credit Card with an online application even though I don’t live and work in HK.
Just HSBC, but that’s just an extra step, i.e. “transfer to HSBC UK, and then transfer to Other UK Bank”.
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They might ask for proof that you’ve spent >183 days in Taiwan… i.e. force you to bring a certificate of your entry and exit dates from NIA. If you’ve only just arrived from another country then you must have another tax residency and they know it. But you can just refuse and try again at a different bank/branch.
It’s annoying enough when I apply for accounts using my Canadian passport and then have to explain that I haven’t had Canadian tax residency for 7 years because I’ve lived in other countries.
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There’s a whole long thread about this:
Short answer: you can, but it’s a massive pain in the arse, even for those of us who’ve been here much longer, and you need to be very persistent and make sure you understand what the actual rules are before you try (because most bank staff don’t).
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I just read through this whole thread and I’d just like to see if I understand the problem and the proposed solution.
Problem:
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Tax is withheld at a higher rate than normal if you work in Taiwan and stay in Taiwan less than 183 days.
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Tax is withheld at a higher rate than normal for your first 183 days if you work in Taiwan and live in Taiwan long term, but you get a refund at the end of the year.
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Some people want to be tax resident in Taiwan without spending 183 days a year.
Proposed Solution:
Redefine ‘domicile’ to something more fuzzy as your ‘center for vital interests’ or allow foreigners to get a household registration.
Is this correct?
My comments:
Problem 2: Plenty of countries, including the US, withhold taxes greater than the amount that may be due from people who may not be around to file and pay. You just get your money back once you file your paperwork. I 100% understand why Taiwan would want to withhold, so you don’t fly out for good half way through the year and never pay them.
Problem 3: Pretty standard globally to have to spend 183 days in a particular year in a country to be considered a tax resident. Few exceptions are out there, but the ones that offer a tax residency with less time are tax havens and often looked at suspiciously. And, maybe good luck convincing a high tax European country that you are a tax resident of a lower tax country because you are domiciled there but spent less than half the year there.
Problem 1: I agree that this isn’t exactly fair though the numbers are probably not huge if taken as a relative percent of your total taxes paid over the years you spend in Taiwan. If you guys want to fix this, then you probably want to go for the minimally invasive change, and make it work the same way as if you were here full time. Just file a return and get a refund for the difference.
Solution: Casting a wide net, and what may be good for you personally may be bad for plenty of other people living or visiting here.
So, perhaps my understanding and comments aren’t completely on the mark, but I’m just trying to understand the real problem here. It seems like nobody should be getting burned for a lot of money given the existing rules. And, if there is something in there that does do that, maybe focus on fixing that rather than redefining a fundamental local concept.
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The tax refund is just an inconvenience. The real problem is that a) they force you to lie on the form that’s supposed to be a self-declaration and b) if you fill it in as they want you to, you may get in trouble with the tax office of your home country since it implies you’re a tax resident there.
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No they keep withholding at the higher rate until you take a day off and spend an hour at every bank showing them your entry/exit paper.
You have to do it every year no matter if you already permanently lived here for a decade.
This is a clear violation of tax treaties Taiwan did with several countries.
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There is nothing fuzzy, that is actually the legal definition of domicile according to the tax treaties TW made with several countries and it is also the agreed definition of domicile in civil law countries and also common in common law countries
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Nothing fuzzy about it. That is literally the definition of “domicile”
No. That is simply one of the tests if the country is not proven to be the ‘center for vital interests’
? Can you please explain how it would affect people “visiting” here? Taiwan can keep the 183 day rule in place for those who are not proven to have Taiwan as the ‘center for vital interests’
An easy way to check for that would be if they have a health insurance card and a Taiwan employer.
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That’s only the case in the US if you qualify as non-resident. Permanent residents (green card) are always tax residents and same with citizens. An alien short term worker is also a resident unless they’re spending very few days in the US (less than 31 days in current year and less than 183 days total in 3-year period). Canada uses concept of “domicile”, where you have your home and ties etc. to determine tax residency.
Why do citizens and ARC/APRC have different tax treatments? Tax residency should be the same between them. Citizens in Taiwan are tax residents if staying over 31 days and also by default a tax resident. Should be the same for permanent residents.
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Are you sure this is a government thing? I was under the impression, and a friend who also worked here confirmed his experience, that your employer should adjust payroll withholding rate after the half year mark.
That is correct, most tax treaties seem to use the same language. However, countries have their own definitions of domicile. My European country of birth has one that is a bit different than the tax treaty. The UK, for example, has a very different idea of domicile. That said, most people prefer to stay non-dom in the UK as that has its own advantages.
But, this goes back to: what is trying to be accomplished here? You could in theory be seen as domiciled in Taiwan in the view of Italian, French, etc. tax authorities based on tax treaty without being seen as domiciled in Taiwan based on local Taiwan laws. Talk to a tax lawyer if that’s what you want.
I’m pretty sure time in a country (183 days) comes before domicile when determining tax residence in tax treaties. Domicile/center of vital interests tie breakers tend to be used when there wasn’t a clear tax residence established before.
Issues can come up if there is no tax treaty between states, and if both have some domicile type tax laws. If you have your vital interests spread between states, then they can both try to claim you. Not too long ago I spent a couple thousand euro trying get some clarity on one of those types of situations, and a promise it would cost a ton more in a legal battle if the state where I claimed not to be domiciled decided they want to tax me.
As for fuzzy domicile, like mentioned above, each state has its own definition on top of the tax treaty. And, here is an example for you: Consider you have a Taiwanese wife and kid living in Taiwan, but you live and work somewhere else. Where is your domicile?
That said, I’m sure for the bulk of the people on here, this isn’t an issue. But, these situations do happen.
The 183 day is a catch all for when they are not certain. It also saves time on investigating most people if they are a tax resident or not.
You can also be “tax resident” in more than one country just as you could be considered not a “tax resident” anywhere.
That’s exactly how this is being used on ARC/APRC cards as the tax office isn’t deeming them domiciled. (Despite having quite obvious ties to Taiwan)
The definition is generally the same around the world. But it is simple. You CAN be considered domiciled in two different places if you aren’t careful. - That’s why when returning to Australia I tick the “tourist” box and not the “returning resident” one.
For Taiwanese… Taiwan actually doesn’t just go off that but a variety of factors. (Not just a wife and kid.)
(1) Enjoy social benefits such as national health insurance, labor insurance, national pension insurance or farmers’ health insurance.
(2) The spouse or minor children live in the Republic of China.
(3) Operate a business, perform business, manage property, be employed to provide labor services, or serve as a director, supervisor or manager within the territory of the Republic of China.
(4) Other living conditions and economic interests are sufficient to determine that the center of life and economic focus is within the territory of the Republic of China.
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I think that summary is basically fine.
I would add the additional/related problems of “people living here long term are required to demonstrate their tax residence every single year and have tax withheld at a higher rate for the first 6+ months of each year until they do” and something about the false CRS self-certifications (which is how a lot of this discussion started).
I would also change the “you get a refund at the end of the year” part in Problem 2. This isn’t really accurate - taxes are filed in May of the following year and the excess returned in July or August or something (?), so you’re talking about the excess being kept for something like 12-18 months, every single year. It’s quite a big difference, and quite a long time.
Yes, I think the solution should be a less arbitrary definition of “domicile” than saying resident foreigners are only resident if they stay more than 183 days, and having that as something that needs to be demonstrated again and again every single year.
I guess there needs to be a more detailed discussion at some point of what constitutes “domiciled”/“ordinarily resident” for foreigners in Taiwan, but I think it might be something along the lines of “anyone holding an ARC/APRC [for longer than 6 months?] and physically inside Taiwan for >31 days”. I imagine there needs to be some kind of physical presence aspect because it’s possible to hold an ARC without being inside Taiwan (gold card holders, for example). It’s difficult to find a definition that covers 100% of cases, but the current definition just seems to be a very lazy one that doesn’t work well for the vast majority of foreigners living here.
I don’t think the withholding part in itself is the problem, but the withheld amount should be fair for people who reside here and it’s currently not.
As far as I know, Taiwanese citizens aren’t assumed to be non-resident in Taiwan for the first 30 days of each year and they don’t have tax withheld at 18% every January because they might leave Taiwan? Can you imagine how unpopular it would be if the government suggested something like that?
AFAIK, 183 days comes up a lot in these conversations about tax residency but normally as one of the tests for assessing it, not the only test. I don’t think that most countries assume that resident foreigners holding alien resident certificates or their equivalents are not really residents and tax them accordingly for the first six months of every year?
We’ve discussed this in another thread, but it seems like the number of people who would be worse off from the proposed change should be much smaller than the number of people who would benefit. I think the former group is just high-earning foreigners who anyway try to keep themselves as non-resident here by staying less than 183 days? I feel like it’s more important to fix the interpretation for residents.
I’m not sure what this means? What’s the fundamental local concept you think we’re trying to redefine? I would say we are trying to fix the underlying issue - the National Taxation Bureau’s differential interpretation of “domicile” under Article 7 of the Income Tax Act as not being available to foreigners.
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The thing is that I will be a Singapore Tax resident until I leave Singapore, in March.
Then I will move to Taiwan, and in the moment I will not be liable for anything in Singapore anymore.
I am not a tax resident of Italy since 8 years.
The safest bet I have - to avoid problems - considering how bad Italian tax office is, is that on the CRS I will put SG as other tax residency for 2024, and that’s it, I guess.
Not sure they will allow me so but we will see.
Do people have employers jumping their tax withholding back to 18% every January? Or are we just talking banks?
Mine just takes 5% and then the rest is up to me to figure out.
Yes, it’s common apparently. Depends on the employer though. It seems like this all started around 2009:
I think the norm for banks in the case of foreigners is that they keep the withholding tax rate on interest at 20% for the entire year. I think it might be possible to change that to the normal 10% from July onwards if you’re willing to go and spend 1-2 hours at each bank asking them to change it with proof of your entry/exit dates, but I can’t imagine too many people bother.
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That is… fucking insanity. Has no one ever gone to court over this? Because I will go to court over this.
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