FAQTaiwan Individual Income Tax Q&A 05
| Q: |
The education subsidy and scholarship for the children of Taiwan military personnel, civil servants and teachers, does it levy on individual income tax? |
| A: |
The education subsidy for the children of Taiwan military personnel, civil servants and teachers is levied on tax, while the scholarship is exempted. The distinction between this two is explained as follows: scholarship is granted on the condition that the academic and conduct grade in school meet a certain standard., hence it is exempted; The education subsidy for the children is based on the number of children in school to be given, and there is no special incentive condition. It is a type of salary and should be combined as salary and levied on tax. |
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Q: |
What is the difference between “Speech Fee” and “Lecture Fee” in Taiwan? |
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A: |
This question can be explained in two points: The Speech Fee paid by public and private organizations, institutions, enterprises and all levels of school for hiring scholar and experts to give a talk on a specific topic, it belongs to “Speech Fee”. If this income and the income from remuneration, royalties, music sheets, composition, screenwriting, comics, etc., the total amount is less than TWD 180,000 in a year and is exempted from the Individual Income Tax, but for the part of exceeding TWD 180,000 should be combined into salary income to declare the Individual Income Tax. The Lecture paid by public and private organizations, institutions, enterprises and all levels of school for hiring lecturers and teachers to hold or teach various training courses, seminars or other activities of a similar nature, it belongs to “Lecture Fee”. This lecture fee is one type of salary income and the income earner must report this income with the total salary income to declare Individual Income Tax. The lecturer as above-mentioned does not necessarily have the certificate of professor, associate professor, lecturer, or teacher. |
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Q: |
What is “Interest Income” in Taiwan? |
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A: |
Interest income is the interest earned from public bonds (including bonds, treasury bills, securities, vouchers issued by the governments at all levels), corporate bonds, financial bonds, various short-term bills, deposits of financial institutions (including the preferential interest rate for Retirement Payment of military personnel, civil servants and teachers) and interest earned from other loans. In addition, the bonus of prize-winning saving coupons, which the amount of bonus exceeds the amount of savings is also the interest income on deposits. However, in accordance with the Postal Remittances and Savings Act, the interest earned from a postal savings account shall be tax exempt. Moreover, interest income from the short-term bills which the redemption price exceeds the initial selling price, interest income from the Financial Asset Beneficiary Securities or Real Estate Beneficiary Securities issued in accordance with the Financial Asset Securitization Act and Clauses of the Real Estate Securitization Act, the interest income for an individual from holding public bonds, corporate bonds and financial bonds or engaging in conditional transactions with the above-mentioned redemption price exceeds the initial purchasing price, it shall not be included in the gross consolidated income. The withholding tax paid cannot be used to offset the tax payable or declare a tax refund. |
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Q: |
What is “Lease Income” and “Royalty Income” in Taiwan? |
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A: |
Lease Income refers to the following income, the remained balance after deducting necessary losses and expenses:
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Q: |
Rental Income of an individual by renting land and houses in Taiwan, is it levied on Individual Income Tax? |
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A: |
Income from renting land and houses belongs to rental income and is levied on Individual Income Tax. Let us divide in following three points to explain: The calculation of land leasing income is based on the annual rental income minus the land value tax paid for the land that year, the remained balance is the income of the year and subjected to declare the Individual Income Tax. The calculation of housing rental income is based on the annual rental income minus the necessary losses and expenses, the remained balance is as the income of the year. The necessary losses and expenses mentioned above refer to the depreciation, repairing expenses, land value tax, house tax and other additional property insurance fee and interest paid to the financial institutions on housing mortgages, etc. If the taxpayer is unable to provide evidence of necessary losses and expenses, he/she is applicable to the expenses standard approved by the Ministry of Finance, the remained balance after deducting 43% of rental income is the rental income of the year and declare the amount in Individual Income Tax. If there is a deposit or any amount similar to deposit for renting land and houses, this money should be calculated at the fixed interest rate of postal savings for a one-year time deposit to calculate rental income. |
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