FAQTaiwan Individual Income Tax Q&A 24
| Q: | What are the penalties if the tax withholder does not pay with the time limit? |
| A: |
When a tax withholder pays for income tax, if the tax has been deducted, but the tax is not paid to the public treasury within the time limit, a 1% late penalty shall be imposed on the late tax for every 2 more days. If the payment is not made within 30 days, it will be transferred to the Administrative Enforcement Agency, Ministry of Justice for enforcement. In addition to recovering the tax that has been withheld, the tax withholder shall be sentenced to fixed-term imprisonment of not more than 5 years or criminal detention in accordance with the Tax Collection Act Article 42 Item 2, in addition to recovering the tax fines below TWD60,000. |
| Q: | How to withhold non-monthly salaries such as bounces and subsidies in Taiwan? |
| A: |
The salary income paid by the tax withholder to Taiwan residents shall be withheld based on the total monthly payment in principle, and the taxpayer shall choose the total monthly based on the salary income withholding tax rate or 5% withholding. However, for bonuses, allowances, subsidies and other non-monthly salary and part-time income, according to the provisions of the salary income withholding method, deduct 5% of their payment amount, and are exempted from being incorporated into the total monthly payment withholding. Since January 1, 20211, the amount paid by the withholders each time does not reach the minimum amount of income subject to tax withholding under the condition of no spouses and dependents prescribed in the Withholding Tax Table for Income from Salaries and Wages, which is TWD84,501 in 2018 – 2020, shall be exempted from being withheld. |
| Q: | What should the Taiwan tax withholder do if the tax withholding is wrongly or over deducted? |
| A: |
After the tax withholder pays the withholding tax, if he (she) finds that there were withheld excessive tax, he should return the excessive tax to the taxpayer, and can apply to the National Taxation Bureau for refund or withhold for the same year if there is still tax that has not been deducted by the end of the year, you can attach the original withholding tax payment form and relevant supporting documents, and go through the refund procedure with the Bureau. In addition, the deduction after the tax withholder has paid the withholding tax, if it is found out that there is underpayment of the tax, the tax withholder shall make up the payment and the amount can be recovered from the taxpayer. |
| Q: | If a tenant closed or moved to an unknown place, which the landlord cannot obtain the withholding statement for the rental income, how should the declaration be made? |
| A: |
If a company or organization closed or moved to an unknown place, which tax has been withheld from the rental income according to law, and the landlord cannot obtain the withholding statement, the landlord can fill in the declaration form of income withholding statement exemption and withholding statement on behalf of the tenant. The landlord should stamp and sign on the remarks of the statement and indicating the reason, together with the declaration of willing to bear the legal responsibility. With the reference stub of this supplementary withholding statement, the landlord can handle the income tax declaration and the tax that has been withheld can be used to offset the tax payable or refund. |
| Q: | Among various types of income that should be withheld for income tax in Taiwan, what kind of interest, rent, commission, and royalties can be exempted from withholding? |
| A: |
All types of income that should be withheld in accordance with the Income Tax Act are exempted from withholding if they are paid according to the law and are exempted from income tax. However, if the fixed tax exemption is adopted, the income exceeding the deduction point should still be withheld. In addition, the interest income from bank loans and the commission, lease and loyalty income from uniform invoice issued by profit-making enterprises in accordance with the law are exempted from withholding. |
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