What are the taxes on small restaurant business?

We moving from Vendor type of business to middle size restaurant type.

Anybody knows what are the taxes on restaurant business?

Your accountant should be able to answer this question.

5 % of Monthly recorded sales bi-monthly basis
Then once a year on your recorded profit… according to your bracket…20 % … ish

Hi everybody,
hope you went to an accountant to get detailed info, by the way this is what I got for a “xiaochi dian”, that translated sounds like “tavern”, if this is the kind of business that you want to start:

  • Every 3 months have to present a tax return and pay an amount, that will depend on your turnover, my accountant says this amount can be the range of 2000-3000 ntd, so between 8k and 12k ntd/year;
  • Every 6 months there will be another tax return to be presented where you will pay different % according to the following rates:
    0 - 250.000 ntd 5%
    250.000 - 555.000 ntd 12%
    555.000 -1110.000 ntd 20%
    1110.000 -2260.000 ntd 30%
    over 2.260.000 ntd 40%
    to close the company a fine of 5000 ntd will be applied

Hire employee:
training period: up to 3 months in the while you can dismiss whenever you want your employee
part time contract: 103 ntd/hour up to 12 h/day
full time: minimum salary 18.780 ntd/month for 8h/day and 48h/week
More 18% of the salary you have to pay for taxes (health insurance and pension)

I would like also to know which is the max number of seats allowed for a xiaochi dian. My accountant says that there is no limit, but this sounds really crazy to me, because if this be true no one will ask for a restaurant license which is much more complicated and expansive. Pls help me cause I want to open soon and I need confirm on this important matter!
Thank you

also check this:
law.moj.gov.tw/Eng/LawClass/LawA … e=N0030001

Heysus Christos!..no wnder everybody keeps a “second” set of books here.
Those rates are ridiculous. This crazy scale just begs for under/false reporting…idiots… :loco:

Hi Tainancowboy,
this is what I got from my accountant, if you have further knowledge or are experienced in this kind of business, you are more than welcome to share.
I really would like to have confirm or a denial about that.

I assume that is on profit, not sales?

Yes, it’s on the profit less the income tax.
Example: your REVENUE is 2.000.000 nt/year;
your COST is 1.000.000 nt/year;
the profit : 2.000.000 - 1.000.000 = 1.000.000 nt/year.
On the profit you pay the income tax (17%). Then you get: 1.000.000-170.000 = 830.000 nt;
According to the range above, your taxation will be the 20% of 830.000 = 166.000 nt;
What’s left in your pocket at the end of the year, the NET is 830.000 - 166.000 = 664.000 nt
1-under the voice “COST” you can insert staff, rent, purchase of machinery, tools, payments, taxi etc…
2-this taxation is applied when you stay more than 183 days/year in Taiwan. Then you are treated exactly like a taiwanse (of course owning your regular ARC).
It’s a “resident taxation”.
If you are not resident in Taiwan, then you have an extra 20% to pay. In this case you should pay the 40% of 830.000 (much heavier…)
830.000 - 332.000 = 498.000 nt. But pls check this second point with an accountant.
Hope this can help

It helps a lot. I am doing a business plan now, so I don’t need it as an exact science yet. Once I am done, I’ll have someone more knowledgable check it out.

Glad it’s useful for you.
I forgot to write that the taxation I previously described is related to a Limited Company.
That’s why with a Limited Company you can apply for a working permit. If you already have your working permit and ARC I suggest to you to apply for a “Store”.
A “store” is just a business category under which you can operate also in catering. With a store you cannot apply for a working permit.
Taxation for store is much lighter.
1 don’t need to remit 500.000 nt in company bank account. Even 100.000 is fine.
2 you can pay VAT by estimate and not calculate on your income: An inspector of the Tax Bureu Office will check your location before you start working and he will decide depending on dimension, employees number, customer target etc. if you are going to overcome a 200.000 nt/month income, or not.
If you are over, than you will pay your VAT based on your income (don’t know how much). But if, for God’s sake, the inspector "estimates " your monthly income under 200.000 you make bingo. Cause you are going to pay only 1% of the monthly income estimated by the inspector. He estimates your income in 150.000 nt/ month? You will pay 1500 nt/month. No matter if your income is over that amount. Of course if your business gets huge, you will be forced to upgrade and pay a calculated VAT.
Over the 1500 nt/ month you have to pay the taxes as taiwan resident: 0 to 500.000 nt/year … 5% etc…
There is another solution. This is a bit tricky…you can open a “Store” and a “LImited Company” just with a 90 days permit. Don’t need any Visa, ARC, working permit. What you are not allowed to do is “phisically” working in the store. This doesn’t mean that you cannot appear in the store, but, making the example of the restaurant, you cannot cook, cut vegetables, bake a pizza etc…rather you are just the owner, that coordinate/manage the daily operativity of your business and check the cash at the end of the day. This is feasible if you have a good staff that you really trust, so you minimaze the risk to be caught from a Labour Inspector while marinating the sushi. In that case, as you know, you have 24 h to leave Formosa…
I got all the info displayed from Jusregal firm: jusregal.com/english.htm, that I really suggest you if you need a CPA.
By the way, may I ask you which kind of restaurant would you like to open and where?

A bar/pub in Changhua. A store won’t really work based off what you described. I’ll have to work there the majority of the time.

Hi Puppet,
Zhanghua, is west coast, isn’t it?
I am planning to open a small cafe/cake shop in Taipei, size not over 25 ping, with 10 seats, rent in the range 30-40k ntd/month, starting with one employee working as front line.
From a first draft forecast it comes out that with 1 million ntd I can cover3/4 month of running business. To cover 7-8 months of activity I need plus 500.000 ntd, so 1,5 million in total, considering to run a Limited Company. Is there anyone out there, that started similar business in the last 2 years in Taiwan, who can confirm or less my calculation?
Thanks folks!

Plan 1.5 mil for the first three months, if not more if you can, just to be safe. Gates break, stoves break, employees bail out on you, suppliers change prices, your boxes aren’t as eye-catching as you thought they would be…customers are slow to come. You’d be surprised how much can go wrong and how much it costs to make things right. I’ve often gone home from work asking ‘where did all the money go!?’

Thanks Jenny, precious advice!

thinking about doing the sam think here , any recommendation of article or site that help me do my research ? thanks