The tax refund policies are quite confusing for me.
I’ve been in Taiwan since June 23, 2019.
I’ve been working at a school since July 1st. For the first month while I was here, I was taxed at 5% and then I was charged 18% tax every month after that.
My work actually reports a lesser amount to the government than I actually make. (If that makes any difference while filing for a tax refund).
When I go file for my tax refund next month, how would the process work?
In my experience, when a company is doing this it’s usually to the company’s advantage rather than the employee’s. The first issue is that your base salary for labor insurance is lower, so if you ever need to claim UI benefits, get injured on the job or go on maternity leave (probably not a possibility for you given your username), you get less money from the government. This is because the employer pays the bulk of your labor insurance contributions and they want to save a few bucks this way.
The second way an employee loses out from double book-keeping like this is when the company skims from the taxes owed. By underdeclaring to the government, they can tax the employee at the “real” rate, pay a lower amount to the government and pocket the difference.
Take a look at all your pay stubs and make sure that this isn’t what’s happened to you. A lot of people I worked with in the past kept poor records and didn’t realize that their company was scamming them so it behooves all of us to keep track of this. If your employer has been doing this to you, they’ll be in a world of trouble if you declare taxes on the amount you’ve been paid rather than what they say you’ve been paid and you’ll need to figure out how you want to deal with this - e.g. tell them how you’re confused because you’re about to file taxes and the numbers don’t add up, yadda yadda, offer a face-saving excuse that allows them to fix their “mistake” and give you back the taxes they accidentally paid because you wouldn’t want the tax bureau to also be confused…
The reason why you might not want them to give you the difference in cash and instead declare your taxes correctly is because of the third way you as an employee can get screwed over by this underhanded shit. If you ever wish to apply for an APRC and you’re not married to a local, you will need to demonstrate proof of income to the authorities. Under-declared income will probably put you under the threshold for applying for an APRC, and if you’re determined to meet the requirements then you’ll need to voluntary declare some “internet work” or some other made-up crap and end up paying additional taxes out of pocket in order to reach the threshold you would have already been over if your employer hadn’t already lied about your pay. If the tax office ever decides to work with the NIA it might also cause you issues with having done work that wasn’t covered by your work permit.
Finally, in terms of your taxes owing, if you have been physically present in Taiwan for 183 days in a calendar year, you will be taxed at the resident rate. If you haven’t left Taiwan since you arrived on June 23, you’ll be taxed as a resident and due for a refund. The forms are easy to fill out and the office has people dedicated to helping foreigners complete them.
any tax refund if you file during month of May is electronically sent to your bank account by late August.
So, bring your bank book when you file at tax bureau.
Taiwan’s tax bureau is great.
Try to file early. The people there will make sure everything is correct. Ask them any question.