Why are some landlords in Taiwan so unwilling to pay their taxes?

I have lived in many different apartments in Taiwan over the years. On several occasions I have had landlords tell me outright they don’t report rent income because they don’t want to pay taxes on it.

This year I told my landlord I plan on reporting my rent payments for a housing deduction (I have never done this in the past). I am not entirely sure how the deduction works or how much money I can get back but I plan on going to the tax office soon to find out.

I informed my landlord because the year prior she had asked me if I planned to claim a housing deduction and I said no. At the time I was not sure if I was eligible and didn’t realize I could get money back. This year I would like to find out. I decided to give my landlord a heads up and long story short she objected due to the fact she had not reported her rent income the year prior, and was concerned about the government fining her for tax evasion.

A number of years ago I had another landlord who included a clause in the rental agreement that stipulated I would have to pay the government fine if her tax evasion was discovered. I really wanted the apartment at the time so I didn’t object. However, I realize now that sort of clause in a rental agreement would not hold up in court and is probably illegal.

This behavior and mindset really bothers me. Why should renters forgo possibly tens of thousands of NT in returns so that landlords can make even more money by not paying the taxes they are legally required to pay? Additionally, why is it acceptable for landlords to bring up this issue with their tenants in the first place? My taxes are my business, their taxes are their business. If a landlord wants to evade taxes, that’s their choice, but they should be prepared to accept the consequences, and they certainly shouldn’t get their tenants involved.

Has anyone here had similar issues? Have I been unlucky in my experience with landlords in Taiwan or is this actually a widespread problem? If the latter is true, why is this the case? Why do landlords think it is ok to pressure their tenants not to claim deductions they are legally allowed to claim? Why are landlords so unwilling to pay taxes?

I plan on moving soon and will be very straightforward in future discussions about this matter with potential landlords: I will inform them in advance that I plan on reporting my rent payments in my tax filings. (we’ll see how that goes…)

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Tax evasion on rental property is widespread here. Out of 4 different places I’ve lived, only one landlord paid taxes.
It will continue to be this way because most people accept this practice as normal. It’s baffling because someone working at a company has to pay tax on their income but rich people with properties rented out are not.

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I’m pretty sure that’s not legal or enforceable. If anything maybe even get you in trouble helping someone avoid taxes. They can say what they want, it’s their issue to pay tax not yours. The trade off is often a verbal agreement for you to have a lower rent. If you didn’t do that, you got ripped of and it’s time to wise up.

It’s not a Taiwan thing. Happens everywhere. It’s common here in Italy too. Renters pay lower rent in exchange for the landlord to not pay taxes.

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Landlords may not be able to get away it much longer.

There was a recent law that mentions that landlords can not prevent renters from registering a household with their apartment addresses as part of a renter’s rights.

This makes me think there are other reasons for revising the renter’s rights, such as going after tax evaders.

It was pretty straight forward for us when we started renting : “Want to report? 30,000 a month. Don’t want to…? Okay, now the price can drop…“

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How much does it affect taxes anyway? What matters more to me is the hhr.

That’s only sometimes. Actually no landlord of mine ever permitted tax reporting because they are afraid it will go on record.

Besides that’s not the point he is making. This guy just wants to do it by the book and get his tax rebate.

Yeah, it’s always been straightforward for me in that way too. It will just result in higher rents. Just kind of SOP here, whatever you think about the tax evasion. The OP is kind of a new angle though in that the landlord is worried about being fined?

Not everywhere. Supply and demand is the main component.

I think it will generally. Supply and demand won’t really be affected, it’s a zero sum situation for the tenant.

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I’m not sure yet how much money I get back for reporting, but I’ve been told landlords only pay 5% or so gains tax. If that is correct, it’s not even that much money to begin with. It absolutely should not be a factor in rent negotiations and landlords have no business asking if you will report or not.

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iirc, you don’t get the whole amount of the rent deducted, only a percentage of it according to the formula on the tax form. and depending on your income, standard deductions vs itemized might get you a bigger refund, unless you donate a lot to non-profit organizations and have the receipt to prove it.

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Previous debate on this.

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This would be a welcome change. Imagine people voting where they live too.

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The privileged pampered landlord class here gets away with so much.

You’d almost guess the folks making the laws here may be part of this class…

Guy

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I can’t believe how people make excuses for them by telling me I don’t understand the culture… Reminds me of the beetle nut chewers shaking down night market people in Tainan for “protection”. As long as the citizens tolerate it or even welcome it, it will continue.

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That’s the kind of commentary on Taiwan, though. “Just by the book…” Hmmm…

I guess it may affect on property tax rate.

I usually move every two years as it stands. When I move I always report that year for my rent tax deduction. If they are evading tax thats on them.

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A post was split to a new topic: Should I get a Taiwan ID before HHR?