FAQFAQ for the Taiwan Individual Income Tax #1
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Q: |
If the Taiwan Individual transferring the newly issued registered shares that meet the requirement of capital increase by surplus earning, how should they declare the income tax? |
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The increase of the capital by surplus earning, according to the regulations that were being annulled, the individual that transfers the shares after obtained, if the transferring price is greater than the par value of shares, the dividend income from the par value should file the income tax. For the value that more than the par value of shares, it should belong to the income from the marketable securities. For the income of marketable securities during the suspension of securities trading, it is exempt from income tax. For the transferring price is smaller than the par value of shares, the actual transferring price should recognize as the dividend income of the year and declare for the income tax. For example, if 100 shares are sold, the par value per share is TWD 10, the transferring price is TWD 12, the dividend income should be declared is TWD 1,000. If the transferring price is TWD 9, the dividend income should be declared will be TWD 900. |
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Q: |
If the shareholder had the shares that meet the requirement of waiving the right of the suspense of tax payment, if the shareholder would like to give up the reward of waiving the right of suspense, how should they declare the income tax? |
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A: |
The unspecified shareholder of the company that acquires newly issued registered shares according to the Articles No. 16 or 17 of the Statute for Upgrading Industry before the amendment on 31 December 1999 which is annulled, and Articles No. 13 of the Statute for the Encouragement of Investment before annulment, if the shareholder does not want to enjoy the exempt of reward (waiving the right of the suspense of tax payment) or decides to send the shares to Taiwan Depository & Clearing Corporation (TDCC) for centralized storage after acquires, the shareholder should merge into giving up the waiving right of the suspense of tax payment or deposited into income tax levied during the storage year in the TDCC. During the calculation of income tax of the aforementioned shares, the surplus earning, or the dividend should distribute to the year 1997 or before the year 1997, and the par value of the share will act as the amount of income. For the surplus earning or the dividend belongs to the year 1997 and after 1997, the total amount of income should be the par value of share adding on the tax-deductible. However, the capital increase by employee bonuses, the par value of the share will be the amount of income. |
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Q: |
How the individual declares the income tax for the incidental trading activities? |
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A: |
The surplus earning derived by an individual from incidental trading activities refers to earnings received by an individual and not by a profit-seeking enterprise from the sale of goods. The income of incidental trading activities is computed by 6% of the sales income and it should consolidate with the profit-seeking enterprise tax to declare the individual income tax. |
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Q: |
The dividend income includes the dividend from the borrowed securities, how should individual handle the individual income tax? |
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A: |
The borrower that still have borrowed securities over the ex-right and ex-dividend date, the dividend received after and paid to the lender, the part of the dividend is not deemed as the income of the borrower. When the borrower should declare to deduct part of the dividend, they should fill in the statement of the transaction of marketable securities, equity, and compensation. |
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Q: |
What is the income from professional practice? |
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A: |
The practitioner of profession refers to a lawyer, certified public accountant, architect, technician, physician, pharmacist, obstetrician, medical examiner, programmers, actuary, real estate appraiser, physiotherapists, occupational therapists, nutritionist, psychologists, land administration agent, certified public bookkeeper, author, broker, scrivener, performer, pilot, producers of programs, trademark agents, patent agents, arbitrator, painter, printmaker, fortune tellers, artisan, public safety inspectors, notary public officer and any other person who makes a living with craftsmanship or art. The income of an individual from professional practice or performances, after deduction of the various expenses or cost, the balance amount shall be the income from professional practice. |
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