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20% Tax

 
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Sunpower



Joined: 22 Jan 2003
Posts: 256
Location: Taipei, TAIWAN

PostPosted: Thu May 01, 2003 5:48 pm    Post subject: 20% Tax Reply with quote

I'm paying 20% income tax every month.

I understand this ends after a 6 month period.

So, by August, I'll have paid income tax at the 20% rate for 6 months.

I make about $37,000 per month right now. I never clear $40,000.

My questions are:

- How do I get the 20% back from the government?
- How long will it take to get back?
- Because I earn less thatn $40,000 per month, will I get a 100% of the tax back?

Thks for any info.
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taiwan boy



Joined: 11 Feb 2003
Posts: 99
Location: China

PostPosted: Thu May 01, 2003 11:39 pm    Post subject: Reply with quote

In Taiwan the tax year ends on 31 December. In January your employer should give you a certificate showing how much you earned and how much tax you paid. You then go to the tax office and file a tax return. You then wait a few months and get a refund cheque if one is due.

I don't know the exact tax rates in Taiwan, but earnings up to a certain amount are tax free, then up to another amount 6% and the next tax rate is 13%. So you are sure to get a refund. Also foreigners must be in Taiwan for 183 days in a year to get a refund.
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Okami



Joined: 25 Jan 2003
Posts: 121
Location: Sunny Sanxia

PostPosted: Fri May 02, 2003 2:36 am    Post subject: Reply with quote

What the hell????

How many hours do you work and is that salary or hourly? It seems like awfully low pay.

The good news is that since you started in February(right?). You should get 14% of it back out of the 20%. Just make sure your employer is actually paying it. Take a trip down to the tax office and ask them, no matter how much you trust your employer. Taiwanese employers have been known to withhold the taxes(in their pockets) and not give them to the tax authorities.

1. You'll get your refund back in March or May. I forget which month. I just know it starts with a M. It's really easy to file as long as your employer actually paid your taxes into the tax office. Remember to keep all receipts, especially the ones detailing that you paid taxes.

2. You'll have to wait till March or May.

3. No they usually keep 6% of your total salary and give back the rest. Depends on how much you make.

I'm serious about making sure your empoyer paid all your taxes. I've spent enough time talking to people and looking at the forums to know that this is a major problem. Let me explain why.

If your employer doesn't pay the taxes they withheld and you report him. The tax authority will want the taxes from somebody and that somebody could be you. So you'll end up paying your taxes twice because you reported the missing tax payments and most people don't keep the receipts detailing their pay and tax withholdings. You'll see this on the forums about once every 2-3 months.

CYA
Okami
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Sunpower



Joined: 22 Jan 2003
Posts: 256
Location: Taipei, TAIWAN

PostPosted: Fri May 02, 2003 6:00 am    Post subject: Reply with quote

Thanks for the info.

Naah, that $37,000 is only for about 14 teaching hours a week.

I make about another $30,000 teaching on the side, tax free - Thankfully!

Thanks, again.
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Sunpower



Joined: 22 Jan 2003
Posts: 256
Location: Taipei, TAIWAN

PostPosted: Fri May 02, 2003 6:04 am    Post subject: Reply with quote

Okami - One last question about this.

Do I have to go down to the tax office and apply to get that 16% or will my employer handle that for me like the did with the ARC, Medical and Work Permit matters?

From the caution you gave re dishonest employers keeping the tax money, I'd say I will probably have to go down to the tax office myself and get the money back on my own. I'd like to know what you've done in the past.
thks.
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Okami



Joined: 25 Jan 2003
Posts: 121
Location: Sunny Sanxia

PostPosted: Fri May 02, 2003 1:52 pm    Post subject: Reply with quote

You'll have to go down and file your taxes yourself. You just give them the forms and they take care of the rest. They're very good at it.

Out of that 20% withholding you should get 14% back. I believe they send you a check or wire/transfer it to your bank acct. So bring your bank book next year, when you file your taxes.

About if your boss is actually paying in all your tax money. You can just go down to the tax office and ask them. Bring along someone who can speak English and Chinese and ask if the amount withheld corresponds to the amount they received. Ask for them to do it quietly, because if your boss is caught, they will be terribly upset.

It raises a red flag for me that someone who started working after January 1st is having 20% taken out for taxes. Most employers only take out 6% for those starting after Jan 1st, since you'll get it back when you file.

I only filed after my first 4 months. They only get money from my bank acct interest now. So I've worked two years here and have paid a whopping $4-6USD in taxes. Doesn't make sense for me to go legit monetarily or professionally. They go me once for $24,000NT and that will be about it if I have any say in it.

CYA
Okami
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wix



Joined: 21 Apr 2003
Posts: 250
Location: Earth

PostPosted: Fri May 02, 2003 4:15 pm    Post subject: Reply with quote

Okami wrote:
It raises a red flag for me that someone who started working after January 1st is having 20% taken out for taxes. Most employers only take out 6% for those starting after Jan 1st, since you'll get it back when you file.


There is a good reason for employers deducting 20% for the first six months. It is so the government can collect tax from any foreigners who leave the country after less than six months. The advice to check with the tax office is good, but the employer is legally obliged to deduct 20% tax for the first six months.
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Sunpower



Joined: 22 Jan 2003
Posts: 256
Location: Taipei, TAIWAN

PostPosted: Fri May 02, 2003 5:24 pm    Post subject: Reply with quote

Thanks for the info Okami/Wix.

I asked a few teachers and it sounds like everything is fine and no one has been jerked around on the 20% tax deal.

Sounds like it's routine.

Thks.
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EOD



Joined: 16 Jan 2003
Posts: 167
Location: Taiwan

PostPosted: Sat May 03, 2003 3:39 am    Post subject: Reply with quote

You need to keep any pay receipts or pay slips you receive and check them thoroughly. You also need to talk to the previous teacher there and see if they had any problems. A lot of people have trouble with their tax returns and refunds.
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Okami



Joined: 25 Jan 2003
Posts: 121
Location: Sunny Sanxia

PostPosted: Sat May 03, 2003 2:58 pm    Post subject: Reply with quote

Wix wrote:
Quote:
There is a good reason for employers deducting 20% for the first six months. It is so the government can collect tax from any foreigners who leave the country after less than six months. The advice to check with the tax office is good, but the employer is legally obliged to deduct 20% tax for the first six months.


I don't believe, they are legally obliged to take out 20% for the first 6 months provided you didn't come into the country before 183 days is up. Can you provide supporting documentation? I've seen only 6% taxes being taken out after Jan. 1st. It might just be a matter of how savvy their accountant is.

Sunpower have you talked to teachers who have been there over 1 year? Just make sure to CYA.

Okami
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Sunpower



Joined: 22 Jan 2003
Posts: 256
Location: Taipei, TAIWAN

PostPosted: Sat May 03, 2003 7:02 pm    Post subject: Reply with quote

Okami:

Yeah, as per my post above, I have talked to some of the senior teachers at my school (10 years and 4 years service with the company) and they have told me not to worry about getting jerked on the 20% tax.

They tell me that they all got it back after their first year.

Like I said, sounds like it's routine and on the up and up.

Thks!
I appreciate you guys helping me out with this.

SP
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wix



Joined: 21 Apr 2003
Posts: 250
Location: Earth

PostPosted: Sun May 04, 2003 1:11 am    Post subject: Reply with quote

This is the best information I could find about tax rates/deductions, etc. It is on tealit.com
http://www.tealit.com/taxes.htm

Quote:
earn up to 370,000, your tax rate is 6%, 370,001 to 990,000 it's 13%, 990,001 to 1,980,000 it's 21%; 1,980,001 - 3,720,000 it's 30%; 3,720,001+...40%


This explains the reason for deducting 10% tax (not 6% tax). A teacher earning NT$60k/month for a year will earn NT$720k and pay NT$67,700 in tax. This is an average tax rate of 9.4%, hence the deduction of tax at 10% is correct. Of course if you start working on January 1st and have tax deducted at 20% for the first six months and then 10% for the next 6 months you will have overpaid the amount of tax due and qualify for a significant refund.
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