●The following regulations are applicable to non-residents of the Republic of China
1.The withholding tax rate on dividend distributed by a company or profit distributed by a cooperative is 30%. However, it would be 20% in case of the investment which was approved in accordance with one of the following rules:
-The Statute for Investment by Overseas Chinese
-The Statute for Investment by Foreign nationals
-The Regulations Governing Securities Investment by Overseas Chinese and Foreign Investors and Procedures for Remittance
2.The withholding tax rate on salaries is 20%.
3.The withholding tax rate on commissions is 20%.
4.The withholding tax rate on interest is 20%.The interest accrued from beneficiary securities or asset-based securities issued according to the Financial Asset Securitization Act and the Real Estate Securitization Act shall be taxed at the rate of 6%.
5.The withholding tax rate on rentals is 20%
6.The withholding tax rate on royalties is 20%
7.The withholding tax rate on cash awards or payments given in contests or prizes for a chance winning is 20%. However, it is tax-exempted when the prize is not more than NT$2,000 from lottery tickets or uniform invoices under the auspices of the government.
8.Withholding tax rate on fees for professional practice is 20%.
9.After deducting a regulative exemption, the retirement payments or pensions shall be withheld at the rate of 20%
Additionally, income which is not subject to the Withholding Code shall be taxed in scope with the following withholding tax rate.
-Income from property transactions shall be filed and taxed at the rate of 35%
-Profits from occasional trade shall be filed and taxed at the rate of 30%
-Income from transferring the tax-differed stocks, the par value of the stocks shall be deemed as the taxable income of the transfer year. If the actual transfer price of such stocks at the time of sale or the market value of such stocks at the time of bestowal or distribution of estate is lower than the par value, the actual transfer price or the market value shall be deemed the taxable income. Such an income shall be filed and taxed at the rate of 30%
However such stocks obtained for the investment approved in accordance with the Statute for Investment by Overseas Chinese or the Statute for Investment by Foreign Nationals, as well as the Regulations Governing Securities Investment by Overseas Chinese and Foreign Investors and Procedures for Remittance, the taxable income shall be taxed at the rate of 20%
-Mortgage interest and Miscellaneous income shall be filed and taxed at the rate of 20%
-Where a trust deed is set up by a profit-seeking enterprise, the beneficiary shall be taxed at the rate of 20% on the value of his entitlement to the trust in the year of setting up, and a newly replaced beneficiary shall be taxed in the year of replacement. Furthermore, the beneficiaries shall be taxed at the rate of 20% on the increasing part of the value of their entitlements when the enterprise makes an increment on the trust fund.
●Tax credit for selling an dwelling and buying one again not later than a period of two years
If a house resided in by the taxpayer (hereafter called "old residence") is sold by him and the gain from the sale is consolidated and taxed, and within a period of 2 years after the date of public registration of such a sale, another house is purchased and used as an owner occupied dwelling at a price exceeding selling price of the old residence, the taxpayer may claim a credit or a refund of aforesaid income tax on the year in which public registration of such a purchase is completed. This provision shall also be applicable in cases where a taxpayer buys first and sells later.
1.Taxpayers who invest in designated enterprises under Article 8 of the Statute for Upgrading Industries before the Dec. 31, 1999 revision, or invest in entities under Article 33 of the Statute for Encouragement of Private Participation in Transportation Infrastructure Projects, may credit up to 20% of the price paid for the acquisition of the registered share certificates of the said enterprises or entities against the individual income tax payable for the year in which the two years holding requirement is met. If the credit is larger than the tax payable of the current year, the balance of the said credit may be carried forward for up to four years.
2.Taxpayers who invest in newly emerging, important and strategic industries under Article 8 of the Statute for Upgrading Industries after the Dec. 31, 1999 revision may credit up to a designated percentage of the price paid for the acquisition of the registered share certificates of the said enterprises or entities against the individual income tax payable within five years starting from the year in which the three years holding requirements is met.
3.The credit in each year shall be limited to not more than 50% of individual income tax payable, with the exception that this limitation shall not apply to the credit in the final year.
●The way of a resident shareholder filing tax on dividends or profits of the year of 1998 or the following years
1.When a company (or a cooperative) making distribution on dividends or profits of the year of 1998 or of the following years to its resident shareholder, the company should prepare "Dividend Voucher" for him to file his tax return. The resident should aggregate the gross dividend in the Individual Incoming Tax Return of the year of the dividend received, and use the imputation tax credit carried in the dividend voucher to offset the income tax payable.
2.When making the above mentioned dividends or profits to its non-resident shareholder， the company should issue him a "tax withholding statement"。The non-resident shareholder shall not use the tax withheld to offset tax payable in case of that he need to file a tax return。 If the non-resident shareholder continuing to stay in ROC for 183 days or more in the same taxable year，he（becoming a resident status ） shall ask the company to correct the "Tax Withholding Statement" to "Dividend Voucher" for filing tax return and offsetting the tax payable.
Taxpayers can make payments at any local bank in Taiwan with a self-payment bill which is filled out by himself or with a payment bill which is filled out by this Administration for the income tax assessed. If the tax withholding amount exceeds the tax payable, the overpaid amount will be refunded according to general procedures.
An alien, who as a "Resident of the ROC" intends to leave temporarily and return in a short period may apply for an income tax certificate for the current year with his payment receipt of the previous year by appointing a Chinese citizen to be the guarantor and filling out an "Agent Appointment and Acceptance" form before he applies with the Police Station for an exit permit for the said year.
1.An alien shall obtain an income tax certificate from this Administration before his departure or upon application for his exit permit or for a visa extension of stay.
2.To credit one's income tax payment which he is obliged to pay in his native country, an official certificate of the tax amount (paid to the ROC) will be issued upon his request.
1.Late filing: Taxpayers shall be surcharged interest on the amount of tax payable. The interest shall be calculated on a daily basis at the interest rate quoted by the Post Office's one-year fixed deposit.
2.Omission or misfiling: A penalty of a maximum of two times the amount of the tax underpaid.
3.Failure to file: A penalty of a maximum of three times the amount of the tax underpaid.
●Aliens who have any inquiry when filing an individual income tax return that is not fully answered in these instructions are welcome to call or come in person to the Foreign Taxpayers Section of this Administration for further information
