There is so much misinformation and misunderstanding of the law in this thread I’m going to stay out
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A foreign company owned by one person in Taiwan gets taxed as a controlled foreign corporation and you should be filing Taiwan corporate taxes for your foreign company. The dividends issued wouldn’t fall under AMT either.
Only seems to be enforced starting from 2023 - and only for entities which profits exceed NT$ 7 million.
And they specifically mention dividends not being taxed again - so I would assume they actually reduce profits.
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Dividends are issued after a corporation’s profits are taxed, so they won’t reduce taxable profits
Check out the ‘Taxable investment income’ section - all the foreign corporation’s business income is included in your individual income.
“Controlled foreign corporation business income of individuals = (current year earnings of CFC …)”
The next section about ‘Avoidance of double taxation’ means dividends won’t be double counted again on your personal income, since it’s already been included in your income from the previous section.
In effect, you cannot use AMT for dividends, since the foreign corporation’s full profits are fully counted in your personal taxable income already.
That’s interesting. I remember you saying that in another thread. I actually wonder whether that’s a bug in the software…
In my case, I stayed in Taiwan around 315/365 days, but the vast majority of the work was done in the 315 days. It doesn’t seem correct if my total income and exemption/deductions are automatically reduced like that. I guess I’d need to go to the tax office to check what they say if that happens.
I wonder if this only occurs below a certain number of days, like 330 or 300, and/or for 5F income manually entered? Roughly how many days were you here?
It’s probably not uncommon for foreigners living here to spend a month or so abroad during the year, and it’d be surprising if this is happening for them too!
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It’s not for income from Taiwanese employer, though.
I doubt that - my tax report actually states:
境外薪資所得計算方式 Compuation Formula of 5F : XXX * 31.195 * (323/365)=YYY
where XXX is the EUR amount
If the income shows in your TW bank account, TW tax authority will know it.
No, I get that.
Maybe “bug” was a poor choice of word. Obviously it was deliberately implemented like this by whoever wrote the software, I’m just not sure whether it should have been and why the two situations would be treated differently under the tax rules. For example, I’m wondering whether this calculation method was incorrectly carried over from some more typical situation and applied to our type of less common situation (living in Taiwan and working for overseas employers/clients) when it shouldn’t have been. By “more typical situation”, I mean things like:
- If someone leaves Taiwan in the middle of a tax year, the exemption/deductions are prorated to the number of days here (IIRC).
- I’m not sure what happens with foreign salary income earned in a tax year before or after someone was resident in Taiwan, e.g., if someone worked in their home country from January to March then moved to Taiwan in April and stayed here for the remainder of the year working for a Taiwanese company. I don’t know if Taiwan disregards the foreign salary income from January to March or expects it to be declared and takes a cut based on the proportion of the year inside Taiwan? If they do the latter, it might explain the origin of the calculation formula. (It’s only quite recently with remote working, and specifically the gold card here, that we’ve been able to work like this and receive foreign salary income while living in Taiwan.)
There does appear to be a cutoff above which this calculation isn’t applied, which is what I was referring to with “330 or 300 [days]” above. I didn’t leave Taiwan in 2021 because of COVID, but in 2020 I was outside for 3 days (length of stay: 363/366), and my computation formula for 5F income still reads “x(366/366)”, so the time outside Taiwan isn’t considered at all here. Funnily enough, the number of days inside Taiwan doesn’t appear at all in the calculation formula for 9B income, so it appears not to be considered there either.
For 2017, 2018, and 2019, I don’t have the sheets with the calculation formulas because I filed in person at the tax office, but according to my records my numbers of days in Taiwan were 341, 331, and 326, respectively… and the prorated calculation formula you’re reporting wasn’t applied there, because the tax calculated by the tax office matches exactly what I calculated myself without considering the number of days in Taiwan (i.e., total income minus total exemption/deductions multiplied by 5%). My taxes would have been lower in those years if your formula was applied, and the fact that they weren’t suggests that any limit for when the formula kicks in is below 326 days (side note: it could be plus/minus several days here, because I’m not sure I calculated the number of days inside Taiwan in the same way the tax office does).
So it’s kind of weird. I wonder if this might be a new thing started after 2020 (whether correctly or incorrectly)… will see what happens when I finally enter my details into the tax software.
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What if you have a client offshore that pays into another country using a personal account. Let’s say that account uses a different name and nationality to the one you use in Taiwan. That foreign nationality passport has never been used in Taiwan. One could use the overseas ATM card to withdraw funds in Taiwan.
Yeah, mine doesn’t. Almost all of my income is paid abroad.
I’m quite sure they won’t know about this. As I said in the other thread, technically the bank is supposed to be reporting your account (and end-of-year balance I think, not sure) to Taiwan, but if you haven’t told them you’re resident here, who knows. Especially with the name/passport mismatch, but even so.
Taiwan isn’t really following the CRS rules correctly anyway. 
There is a section “Income” when you declare in person to the tax office.
Usually, it filled with help from bank books printout for additional income.
Edit: if you are American, pretty sure IRS will get you, no matter what.
What if you run a night market stall and everyone pays cash?
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You just do what the typical night market stall owner does – keep thorough records of your daily income then declare the full amount when you do your taxes. 
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You definitely have to plan. As a US citizen, I file an extension, then file taxes in Taiwan, then files in the US. I’ve heard of some people renouncing due to taxes in the US however if you qualify for the Foreign Earned Income Exclusion, then renouncing is probably not a good idea. Foreign Earned Income Exclusion | Internal Revenue Service I have heard the horror stories of people getting citizenship, then being taxed on capital gains from the sale of a property outside of the US that was acquired prior to their citizenship date…
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So I’ve just been playing around with the offline version of the software, and I’m still not sure about this and whether the online software is calculating it correctly. This is how the offline version looks:
All three of the fields “Income Days”, “Income During (From)”, and “(To)” are modifiable (and need to be completed), and “Total Days” is calculated from the last two for use in the calculation formula, but it’s not clear to me what the difference between “Income Days” and “Income During”/“Total Days” is intended to be. Neither of these seem to be related to “Resident Days” shown in an earlier tab (315 days for 2022 in my case).
I wonder if this is supposed to be for people entering monthly salary details for each employer/client rather than annual totals?
@qwert_zuiop, did you check with the tax office whether this had been calculated correctly in your case? I’m finding it kind of hard to believe that the income amount should be reduced for days outside Taiwan…
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It makes sense for calculating 90 days - half year taxes, since all your foreign income is adjusted and taxed in Taiwan based on prorated amount. They probably forgot to remove that formula for half year +. However I read of others getting it adjusted later on to full year rather than pro rated, if you ask for tax certificate and they audit your return.
I’m not sure it’s this. That’s still related to the number of days inside Taiwan, which is given on another tab.
What if you own 15 apartments and don’t declare tax on them like 95% of landlords.
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If you’re a foreigner, you’ll get deported and all the Taiwan news outlets will be talking about foreigners evading taxes, your properties will probably all be confiscated to set an example and given as a tax rebate back to citizens
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