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Common FAQ for Individual Income Tax in Taiwan 40

Q: How to declare Individual Income Tax for “resident individual in the domestic territory”?
A: The definition of source income for “resident individual in the domestic territory” is a variety of income gained in Taiwan. Those whose income is via labor service to foreign employers in Taiwan shall submit the declaration form to the national taxation bureau for the declaration of sums of individual tax income and each miscellaneous items of deduction from 01/05/2021 to 31/05/2021 (or the extended deadline of declaration by laws). The net amount of individual income shall be the result deducted from the amount of exemption, deduction, the basic living expense difference, and the amount of deduction for investment of startup. The number of tax return shall be the net amount calculated in the progressive tax rate and shall be paid to Tax and Fee Collections Treasury by taxpayers themselves.

Q: What kind of identity to declare the individual income tax in the condition of one of the spouses being “resident individual in Taiwan” and the other being “non-resident individual in Taiwan”?
A: In the condition of the non-resident individual in Taiwan with source income from Taiwan and the other part of spouses being the resident individual in Taiwan, the non-resident individual is able to declare the individual income tax with the spouse jointly in accordance with Income Tax Act.

Q: How to declare individual income tax for taxpayers with dual nationalities?
A: The identity of taxpayers with dual nationalities shall be classified as “Resident individual in Taiwan” or “Non-resident individual in Taiwan” first in accordance with Income Tax Act. The way of declaration shall be made fully dependent on the identity enacted at Income Tax Act. Regardless of the source income gained in the identity of natives or foreigners, the income shall be declared jointly pursuant to laws.

Q: Why the income of labor service from foreign employers shall be declared Individual Income Tax in the period of stay in Taiwan?
A: Except for the particular conditions, most of foreign employers who undertake business activities or provide labor service like sales of goods, marketing research, procurement, inspection and technics are with the duty to pay taxes since the environment and facilities are wholly furnished as well as protected by the Taiwan government in the period of their stay. Besides, along with the international taxation standard, the declaration of income from labor service is usually pursuant to laws enacted in the place of labor service.

Q: How to deduct the amount of tax for foreigners in the identity of “non-resident individual in Taiwan” converted into “resident individual in Taiwan” with the dividend and surplus from their companies or cooperatives?
A: Foreign taxpayers in the identity of “non-resident individual in Taiwan” with withholding proof for various incomes from the dividend or surplus of invested companies or cooperatives staying in Taiwan for 183 days in that fiscal year shall submit the proof of stay for 183 days in the same fiscal year (such as passport) to the original withholding agency to change the proof for various incomes into the proof of dividend for the declaration of Individual Income Tax after becoming “resident individual in Taiwan”.