Taiwan Individual Income Tax Q&A 04-Company Formation_Trademark Registration_Tax Service - Hong Kong CPA

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Taiwan Individual Income Tax Q&A 04

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What is the vocational clothing fee in Taiwan? Is there any limit on the amount?

The taxpayer must wear special clothing or performance-specific clothing that is necessary for his/her occupation and those clothes is not used for daily wear. The purchase or lease costs and the payment for cleaning, ironing, repairing and maintaining on those special clothing is regarded as the vocational clothing fee.
Uniforms or custom-made clothing that are required to perform duties according to laws and regulations, such as judges, prosecutors, clerks of court, public defenders and lawyers shall wear uniforms when performing duties in court.
For the business operation and profit-seeking purpose, employers require the taxpayer to wear clothing when providing labor services, such as financial industry, aviation industry, passenger transport industry and catering industry, and require employees to wear uniforms.
For the occupational safety purpose, it is necessary to wear protective clothing, such as in medical treatment, construction industry, architecture. The diving suits made with special materials with protection and reflection mark when working in diving operation.
Special clothing for performances or competitions of singers, musicians, artists or athletes, etc. or special clothing for stage performance of models.
The annual exemption limit per person is limited to 3% of the total salary income from that profession in 2019, and the salary income not related from that profession shall not be included in the calculation.

What is the learning and training fee in Taiwan? Is there any limit on the amount?

The taxpayers participate some courses related to specific skills or professional knowledge in accordance with the job position, work duties or legal requirements and the courses is setup by qualified institutions. The training fees paid including the enrollment fees, travel expenses and necessary expenses such as the payment of teaching materials directly to the course, internship materials, venue fees and training equipment fees, etc. The qualified institutions including the follow institutions:
Within territory:

	Research or training institutions by Government.
	Vocational training institutions established or registered with the permission of the Ministry of Labor.
	Teaching hospital qualified by the Ministry of Health and Welfare.
	Schools at all levels.
	The purpose of training talents courses established by the foundations or corporate legal person.
	Short-term tuition classes which have been registered according to the regulations.
	Legal person whose business items are related to personnel training.
Overseas:	Research or training institutions of foreign governments
	The colleges, universities and high school or vocational schools in overseas, Mainland China, Hong Kong or Macau which is recognized and approved by roster by the Ministry of Education ; Foreign schools not included in the roster are also applicable if approved by the Ministry of Education.
	Other important foreign research and training institutions.

The annual exemption limit per person is limited to 3% of his/her total salary income in 2019.

What is professional tools expense in Taiwan? Is there any limit on the amount?

Expenses for purchasing books, periodicals, and tools exclusively for the usage on work.
Books and periodicals: Chinese and foreign language books, periodicals, or databases in occupation-related fields.

Tools:	Equipment and apparatus necessary for occupation and exclusively for use in duties or work.
	For the occupational safety purpose, the required protective equipment and apparatus.
	Special equipment required for performances or competitions, such as performing, music or sports related occupations.

Professional tools for work with a performance of at least two years and the expenditure of tools exceeds TWD 80,000, it should apply a “straight line” method for depreciation or amortize the fees without interruption. If the use of period is 3 years or more, no scrap value to be listed and the base of calculation for depreciation is one year. For the use of period is one year or less, the calculation of depreciation is based on the proportion of the actual number of months on using the equipment to the whole year. If the use of period is less than a month, it will be rounded up to one month for calculation. If the use of period for the tools is less than 2 years or the expenditure amount does not exceed TWD 80,000, it can be reported in full amount in the year of purchase, without any depreciation or amortization.
The annual exemption limit per person is limited to 3% of the total salary income from that profession in 2019, and the salary income not related from that profession shall not be included in the calculation.

Overtime pay in Taiwan, does it levy on individual income tax?

If an individual perform his/her duties or work for the purpose which set by the employer, the overtime pay does not exceed the prescribed standard of overtime pay is exempted from the individual income tax ; However, if the overtime pay exceeds the prescribed standard, the excess part shall be included in the salary income and filed to declare the individual income tax.
If the overtime pay is regardless of whether there is overtime or the number of overtime hours and paid on a monthly fixed amount, the nature of it should be defined as an allowance, the withholding tax amount should be calculated on the total amount of salary and this allowance. It is not applicable to the regulation on exemption of individual income tax.

What is the exemption standard of individual income tax on overtime pay in Taiwan?

This question can be divided in to 3items to describe:
Employees of government agencies or organizations are exempted from individual income tax for overtime pay paid in accordance with government regulations.
Employees in public and private enterprises are exempted from individual income tax for overtime pay paid within the limits stipulated in the Article 24 and 32 of the Labor Standards Act, regardless of whether the gender of workers, employers extend the working hours of work together with the normal working hours, it shall not exceed 12 hours in one day, and the overtime working hours shall not be exceed 46 hours in a month (in compliance with the Cause 2 and 3 of Article 32 of Labor Standards Act, the overtime working hours shall not exceed 54 hours in a month and not exceed 138 hours for 3 months.)
Employees of government agencies, organizations and public and private enterprises who performing their duties or works for the purpose of their employers on national holidays, public holidays and special holidays, if the amount of overtime pay is within the prescribed standard range, it is exempted from the individual income tax. And the overtime working hours may be excluded in the calculation of “Total overtime working hours on weekdays of each month”. For example, if an employee has worked 49 hours of overtime during the weekdays in a month, 46 hours are exempted from tax according to the regulations, and the additional 3 hours of overtime pay shall be included in the salary income and levy on individual income tax. If he/she is required to work overtime for 8 hours on a national holiday, as long as the overtime pay received meets the standards of the Labor Standards Act, the overtime pay for these 8 hours is still exempted from individual income tax.

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