(For whom paid tax in China)

For Taiwanese who have any source of income in China, these citizens should declare the individual income tax in May annually with the tax incurred in China jointly. Therefore, If the tax in China has already declared and paid, the tax payable in Taiwan can be deducted from to avoid the event of dual imposition of tax occurring.

To whom he/she takes part in any kind of business activity between Taiwan and China regularly, if he/she is an official tax resident in Taiwan, instead of in China, the individual income tax should be declared necessarily. Most of the income in China is able to be his/her tax withheld at source, such as the salary withholding statement in China, which can be the tax payment certificate.

For example, an office worker who has to commute from Taiwan and China regularly for the purpose of business and whose income in China converted into TWD being about NT$ 100,000, was already deducted the tax withheld at source. At the time of declaration of individual income tax in Taiwan this year, after deducting miscellaneous items, the rate of individual income tax becomes 5%. In this case, even if this person declared with the tax payment certificate in China, the maximum amount of deduction for tax payable will only be NT$ 5000.

The other important point must be bear in mind is the maximum amount of deduction for tax payable should not exceed the amount of increase for tax payable with the source of income in China.

As stated above, in the condition of any Taiwanese residents with the income from China, these persons should be aware particularly that no matter how much of income it is, which should be declared with individual tax income jointly (in domestic earnings, instead of overseas.) in the period of declaration of income tax return on May annually. For whom has already paid the income tax in China, the following documents should be prepared in advance:

(1)	Tax Payment Certificate promulgated by related authority in China
(2)	Tax Payment Certificate recognized by Straits Exchange Foundation
(3)	The deductible amount of individual income tax. (The amount should not exceed the amount of increase for tax payable with the source of income in China.)

Kind reminder from Kaizen that at the period of declaration of individual tax income each year, even if there are plenty of required information is available in National Taxation Bureau, the information of income source from China is not included.  Thus, those who involves in any kind of business activity between Taiwan and China regularly should declare actively to avoid the circumstance of omission of declaration. Once any omission or failure to declare is caught up, these persons not only need to make up the amount of tax, but in the worst scenario, be punished with the extra fine.