Ok, so for Foreign company sourced dividends, this is what we have:
“In addition, dividends from foreign companies received by resident individuals may be subject to AMT at a rate of 20%.”
And the following relating to AMT rules :
Resident taxpayers with AMT taxable income of more than NT$6.7 million may be subject to AMT at the current rate of 20%. Under the Income Basic Tax Act, a taxpayer must
calculate the amount of AMT due on income subject to AMT and compare the result with the regular income tax payable. Resident taxpayers must pay the higher of the AMT or regular income tax payable amounts. Any foreign taxes paid on offshore income may be offset against AMT payable with certain limitations.
AMT is based on the following formulae:
• Income subject to AMT = Regular taxable income + add- back items
• AMT = (Income subject to AMT - NT$6.7 million) x 20%
The add-back items include overseas income exceeding NT$1 million in a tax year, proceeds from certain life insurance and annuity policies, income derived from transactions of privately-placed securities investment trust funds, and non- cash charitable donations claimed as itemised deductions.
It is a fair bit to digest. It is even more so in that now we must consider the tax agreement with the source country, which will likely be taken at source, ie from your broker as a tax before you receive it. This generally is anything from 10-25%, depending on the country and the agreement with Taiwan. In this case, compared to capital gains from the sale of equities above, the country of the stock/fund does matter. I know the United States takes 25% off of dividend payments already from me with my US Index (as a foreign investor) and I am currently in Canada. So it definitely has an impact if you would be relying on dividends or interest rather than gains as income.
Going back to the AMT formula above, I think as long as your Taiwan income + your dividends/interest are not above 6.7 million NT$, you will not owe additional taxes in Taiwan. However, you already have had to pay the withholding tax at source, so it is not like it was completely “tax free”.
This is my take on it.Thanks again to @fifieldt for the information.
All of the information in my last 2 posts still needs to be confirmed by the taxation office.