Job Discussion Forums

[CWanders]

I searched through the older posts, but didn't find an answer to this specific tax question.

The 183 days is correlated to your time spent in Taiwan, not time spent with a specific employer, right?

(I may be changing jobs just as I hit the six month mark and I'd hate to be stuck at the 20% tax rate because of it.)

Thanks!

[markholmes]

Correct. It is time in the country as judged by your passport. If you have to do a visa run out of country make sure you still have enough days.

[penelopeinterlope]

HI,

Here is what I understand of the tax system in Taiwan: one gets taxed 20% for the first 6 months (183 days), and then it goes to 10%. if you stay more than 6 months, you can get a tax return for anything earned after december 1st.

My question is, how much is the tax return? I read somewhere it was 14%, but 14% of what? of the gross salary? that would mean that the actual taxation for the first period would be of only 6%... am I making any sense?

thanks,

Penny

[dvasas]

[forest1979]

The answer to the question about the amount is tax returns is subject to the level of taxable salary, i.e. how much you have earned. It is pretty straightforward to claim your rebate from the tax office if you're living in Taiwan. However, from my own experiences, if you leave Taiwan and try to claim your tax rebate it is a hugely problematic process - not so much again from dealing directly with the Tax Office itself, but more so from the fact that the rebate issued as a check is only cashable INSIDE Taiwan, and you need to have letters of authorisation issued in person to you from Taiwan trade offices overseas before it can then be cashed by an friend/former colleague, etc., in Taiwan. From my own experience of leaving Taiwan, claiming a rebate and then getting the check cashed was more than 12 months.

[markholmes]

I seem to remember my tax rebates being in cash.

[forest1979]

If you have left Taiwan then you get issued with a check.

[dvasas]

[forest1979]

Getting a check when you're in Taiwan is absolutely no hassle but when you have left Taiwan and closed your bank account down, the scenario changes due to the check being rebated being issued by the central bank of Taiwan, and so is only cashable locally. As I have said before I need to nominate a friend and then get authorization from a overseas trade office so she can collect it, which means filling out forms and getting them checked and oked - documents I should add that I have to sign in person and in view of the office's director! Thankfully it just takes me an hour to get to the office in the city I am based in, but I am not sure what happens if you live in the middle states of the US and the nearest trade offices are based in somewhere like LA or NY?

[smashjack]

[forest1979]

The tax rebate is calculated in accord with a variety of variables, e.g. your marital status, property owning status, if you have kids, etc. The only times I have heard of anyone obtaining such a sizeable amount were people with wives, kids, etc., and earning far more than the figure previously given (NT$68,000/month). From my own experience I ended up with something like NT$110,000 rebate but this was calculated from my wife and I's taxable income (well over NT$2 million in the financial year - plus my employers messed up the tax situation so I paid 20% after 183 days for some months), our married status, a letter from the landlord stating our rent per month (which contributes it seems to calculating what rebate you can get), and some other things which presently slip my mind. As I understood the system it's a 20% tax rate for the first 183 days and you can't claim any rebate on that figure. It's fixed, I believe. After 183 days the tax rate drops markedly, and again I believe it's tied to your level of income from this point. Your employers should firmly state what the regulations are and a simple tip before coming to Taiwan is to ask lots of questions about the tax system.

I might be wrong about this all as it was some years since I claimed by first year rebate but I think the 20%/183 day rule is pretty steadfast. On some occassions I expected to get a rebate but found I had to actually pay money to the tax office (something like US$400-500).

[clark.w.griswald]

Penny and smashjack you both seem to have the general idea.

The tax rate is either 6 or 13% for most foreigners depending upon how much you earn.

For the first 183 days you get taxed 20% and the employer is required to deduct this from your salary pre-payment and send it to the tax office. You should ensure that your payslip states this each month. Around Feb. each year the employer needs to give you a Tax Withholding Statement that shows how much tax they deducted and paid to the tax office on your behalf. When you file your taxes the tax office will determine how much tax you should have paid based upon the 6 or 13% rate, and you will get a refund of the difference that you overpaid.

Now many schools complicate things a bit by hedging their responsibilities and conitinuing to deduct 10% (midway between 6 and 13%) after the intial 183 days are up. Don't worry about this as you will get back any tax that you overpaid - kind of like forced savings.

The biggest problems include employers who don't understand the 20% / 183 day rule and end up either not deducting enough taxes leaving you with a shortfall that you need to make up for at tax time, or employers that deduct the taxes but don't pay them to the government and therefore can't issue a tax withholding statement.

Make sure your monthly pay slip makes a clear note of any deductions and the purpose of these deductions.

[Darotker]

Hi CWanders,

I remember from awhile back that you were working at HESS. Is that correct? It seems you are breaking your contract and leaving HESS, like many, many teachers seem to do. It would be interesting to hear your take on your reasons for leaving HESS.
It would also be interesting to hear how many people from your training group have left HESS.

There are so many negative things about HESS out there, it would be useful to hear more specific things from someone like you.