Taxation Discussion
Common questions regarding taxation are answered here.
National Taxation Bureau of Taipei announced that revised Article 94-1, 102-1 and 126 of Income Tax Act were passed at the 15th meeting of the 8th Legislative Yuan on December 24, 2013 and promulgated by Presidential Decree, with the effective date of the amendments determined by the Executive Yuan. The withholding statement of individual income tax is no longer required starting from the effective date.
Based on the explanation of National Taxation Bureau, the issue of individual income tax statements will adopt the policy of “Not required in principle; required only under special cases.” Therefore, tax units are no longer required to issue tax statements to tax payers before February 10 of each year unless the tax payers request the statements. At the same time, tax units are required to provide multiple and convenient ways for tax payers to apply for the statements.
Upon the new policy going into effect, the ways to acquire personal income data are as follows:
Inquire or apply from the tax unit.
During the tax declaration period, you can inquire at the offices of National Taxation Bureau and local taxation offices:
- Inquire in person: Present your ROC ID card or your ARC; after confirming your identity; you will be able to inquire in person.
- Deputize someone to apply for inquiry: A deputized agent is required to bring the letter of deputization, their own ID card or ARC and that of the applicant. After identity confirmation, the deputy will be able to inquire about this information. If the applicant’s identity card or ARC is a photocopied version, the applicant and the deputy will be required to sign an affidavit that the copied version is identical with the original; the taxation office will keep the photocopied document for future reference.
During the tax declaration period, one may access the online declaration system with Citizen Digital Certificate issued by Ministry of the Interior or other digital certificates issued by Ministry of Finance. Through the online system, you will be able to inquire about the statements of the tax year from the Fiscal Information Agency, Ministry of Finance.
Please refer to the income details of the taxation calculation notification sent out by National Taxation Bureau before April 25 each year.
Colleagues may log in from Integrated Information System, choose Individual Salary Query under Person Information, then click on Withholding and Non-Withholding Tax Statement Query, and key in the query year.
Full-time assistants, drivers, laborers, and security guards may use E-Form 1304 to apply.
If money is won by chance or contest, no matter if it is prizes or awards, it is categorized as 91 Chance and Contest Prize Income. Small gifts received from participating in an activity are gifts which do not need to be listed as income. For some large-scale contests such as cheerleading dance competition held by the University, the first three places may be rewarded with monetary prizes. Based on the actual situation, it is 91 Chance and Contest Prize Income. However, it is usually the student association or the department which makes an overall plan for the prizes (such as paying for cheerleading dance fees or celebration meal for students and student association), not the participants themselves. Thus, though it should belong to 91 Chance and Contest Prize Income, since prizewinners do not actually receive the prizes and may only receive an extremely small amount after allocation, they can have one person to act on behalf of others to receive the monetary prize and seal with the department seal or the unit seal. This will not be counted as individual annual income. If it is a dormitory cleaning contest by floor and the prizewinners are the residents on the same floor, the prizes are used for celebration and not counted as individual annual income. However, if the contest rewards one room resident(s) who can be clearly identified, even it’s just a small USB, it shall be classified as individual income and cannot be signed for on behalf of that person. Besides, whether gifts or monetary prizes, there should be a distribution list signed that should be attached to the voucher as a proof when verifying disbursement.
Discussion of Related Affairs and Withholding Matters When Inviting Foreigners to Taiwan
Common questions regarding foreigners’ income when working in Taiwan are answered here.
Foreigners who stay in Taiwan for less than 183 days and are paid more than 37,875NTD monthly will be taxed at 18%, while those who are paid less than 37,875NTD will be taxed at 6%.
20% tax will be deducted from non-salary income if the total income is more than 5,000 NTD. No tax will be deducted for income less than 5,000NTD, but both must be reported to the National Taxation Bureau within 10 days.
Please inform Controller’s Division within 5 days starting from the date of payment and pay the tax at the Bursar’s Section within 10 days, providing a copy of the foreigner’s passport for the university to file the withholding tax. For detailed information, please refer to “Tax Deduction Notices” under Regulations/ Related MCU Regulations/ Other Relevant Regulations on Controller’s website.
For foreign individuals, there are 3 periods for filing income tax depending on the time period the individual stayed in the R.O.C. in the taxable year (Jan. 1 to Dec. 31).
For individuals who stay in the R.O.C. for no more than 90 days within a taxable year, there is no need for the individual to file income tax for income from sources in R.O.C. as the tax will be deducted from the payment paid by the tax withholder; However, if there is other income not subject to withholding, the taxpayer should declare the tax before leaving the R.O.C. If the individual is in the R.O.C. during the regular time period for declaring tax, one should comply with relevant laws and declare tax within the deadline.
For individuals who stay in the R.O.C. for more than 90 days but not over 183 days, the tax on income from sources in the R.O.C. will be deducted from the payment paid by the tax withholder. If there is other income not subject to withholding or income received by providing services within the R.O.C. but paid by an overseas employer, the individual should declare the tax before leaving the R.O.C. If the individual is in the R.O.C. during the regular time period for declaring tax, one should comply with relevant laws and file tax within the deadline.
Individuals who stay in the R.O.C. for more than 183 days and with an annual income that exceeds the tax threshold are required to fill out Individual Income Tax Return Form for Aliens before May 31 of the succeeding year and declare their income tax with the National Taxation Bureau regional office. Those who leave the R.O.C. in the middle of a year should declare income tax of the taxable year before leaving.
Annual income tax declaration should be completed during May 1 to May 31 of the succeeding year (When May 31 is a holiday, the deadline is postponed to the next working day.). National Taxation Bureau of Taipei reminds: Tax payers should declare their taxes as soon as possible to avoid the crowds during the last few days of May.
For foreigners who have left the R.O.C. with tax paid based on non-resident tax rate but returned to the R.O.C. later and stayed for more than 183 days in the taxable year, their tax to be paid should be recalculated based on the tax rate of residents. The tax paid previously may be deducted from the final tax due.
Disbursement Verification Discussion
Common questions regarding disbursement verification are answered here.
In principle, disbursements should be verified within two weeks after the end of activity.
For long-term activities, disbursements can be verified periodically.
Special projects disbursements should be verified upon the receipt of approved claim voucher
If individual receipt of payment is included in the claim voucher, the disbursement must be verified before July (date signed from January to July) and December (date signed from August to December) of each year.
In principle, disbursements should be verified within two weeks after the end of activity.
Before the end of each AY (7/31), all unverified remaining cash should be returned to university regardless of whether the activity is completed or not. If the activity is a cross-year activity, the responsible unit is required to apply for a cash advance at the beginning of the new AY.
Starting from January 1, 2021, Bureau of National Health Insurance adjusted the supplementary premium in three categories: 9A, 9B Income from Professional Practice, 5A Interest Income, and 51 Income from Lease. Among which, 9B Income from Professional Practice (thesis advising fee(s)) is more related to university. Starting from January 1, 2021, for 9B Income from Professional Practice, the initial deduction for an individual is raised from NT$5,000 to NT$24,000 and the withholding rate is 2.11%. For 50 Salary Income, the allowance per individual before that individual shall bear supplementary premium is from NT$24,000 and above; employers bear 2.11% supplementary premium for all 50 Salary Income.
Individuals who hold union labor insurance proof may not necessarily be exempt from 2nd Generation NHI because they might not be insured by NHI through their union. The responsible staff should first key in income in Personnel Verification System and submit the individual’s payment receipts for NHI and labor insurance to Ms. Chen, Hsiu-Chuan of Human Resources Division. Once the HR Division completes the verification that the individual is qualified for exemption, the system will determine the individual’s identity and the Division will notify the responsible staff to conduct verification. Basically, the HR Division will re-verify all university income recipients’ identity at the beginning of each month. However, if there are provisional income items such as keynote speech, the responsible staff should first submit the information mentioned above to the HR Division to verify the individual’s identity.
Work-study Students Insurance Section
Common questions regarding to work-study student insurance are answered here.
Employers should insure all those who are in employment with labor insurance. Employment relationship means a contract for hire of services whereby one party agrees to serve for a fixed or undefined period to another party, and the latter shall pay remuneration (Civil Code). The labor settlement between employees and employer is an overall judgement of contract attributes based on facts in accordance with the law, not only a document titled ‘commission’ or a ‘contract of work’. In detail, if an employer asks hired laborers to sign a lopsided contract of commission or contract of work, due to its labor service characteristics, it is essentially a hire of services. Although formally it is a contract of work or a contract of commission, it does not lose the characteristics of hire of services. Though the facts don’t line up, it is still a hire of services relationship for both parties.
No, since you cannot be certain if the student only works in one unit or if he/she serves as a teacher’s assistant or not. Besides, sometimes work-study insurance is based on daily payment. The insurance for this type of work-study students may be on a dissimilar basis, such as not based on payment but the payment may be converted to monthly salary. For example, if a work-study student only works one day and is paid in NT$600 monthly. When insured under the National Taxation Bureau, it is converted to NT$600*30=NT$18,000 to insure. Though the payment to this type of work-study student is small, when magnified to monthly salary, the insured rank is large. If the actual payment is NT$650, though the total amount doesn’t exceed basic working hours, when converted to insured amount, it can fall into a different rank, possibly resulting in being underinsured. Thus, when verifying disbursement, each unit shall please base this on what was reported when paying the work-study money.
