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    A: Shall Come Into Force On 1 January, 2010 in Accordance With Paragraph 7, Article 12 of The Income Basic Tax Act

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    Sameer Kumar
    The document summarizes the key details of Taiwan's income basic tax levied on individual overseas income, which took effect on January 1, 2010. It addresses common questions about the tax including: what income is taxed, who has to pay, how residency is defined, tax thresholds, how overseas tax credits can reduce the amount owed, and obligations for foreign professionals working in Taiwan. The goal is to facilitate calculation and reporting of overseas income for individual income tax purposes.

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    A: Shall Come Into Force On 1 January, 2010 in Accordance With Paragraph 7, Article 12 of The Income Basic Tax Act

    Uploaded by

    Sameer Kumar
    39 views5 pages
    The document summarizes the key details of Taiwan's income basic tax levied on individual overseas income, which took effect on January 1, 2010. It addresses common questions about the tax including: what income is taxed, who has to pay, how residency is defined, tax thresholds, how overseas tax credits can reduce the amount owed, and obligations for foreign professionals working in Taiwan. The goal is to facilitate calculation and reporting of overseas income for individual income tax purposes.

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    20101227-2

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    The document summarizes the key details of Taiwan's income basic tax levied on individual overseas income, which took effect on January 1, 2010. It addresses common questions about the tax including: what income is taxed, who has to pay, how residency is defined, tax thresholds, how overseas tax credits can reduce the amount owed, and obligations for foreign professionals working in Taiwan. The goal is to facilitate calculation and reporting of overseas income for individual income tax purposes.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    39 views5 pages

    A: Shall Come Into Force On 1 January, 2010 in Accordance With Paragraph 7, Article 12 of The Income Basic Tax Act

    Uploaded by

    Sameer Kumar
    The document summarizes the key details of Taiwan's income basic tax levied on individual overseas income, which took effect on January 1, 2010. It addresses common questions about the tax including: what income is taxed, who has to pay, how residency is defined, tax thresholds, how overseas tax credits can reduce the amount owed, and obligations for foreign professionals working in Taiwan. The goal is to facilitate calculation and reporting of overseas income for individual income tax purposes.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 5

    The Income basic tax levied on individual overseas income

    Q&A (Simple version)

    1. Q: What is the date when the income basic tax levied on


    individual overseas income shall come into force?
    A: The Executive Yuan has announced that the income
    basic tax levied on individual overseas income shall come
    into force on 1st January, 2010 in accordance with Paragraph 7,
    Article 12 of the Income Basic Tax Act.

    2. Q: What is the scope of individual overseas income?


    A: According to the Income Basic Tax Act, individual overseas
    income shall be that not derived from the sources in the
    ROC under the provision of Article 8 of the Income Tax Act
    and not from the sources in the Mainland Area under the
    provisions of Act Governing Relations between Peoples of
    the Taiwan Area and the Mainland Area.

    3. Q: What are the categories of individual overseas income?


    A: To facilitate the calculation and aggregation of individual
    overseas income, the ten categories of individual overseas
    income are the same as those derived from sources inside
    the ROC.

    4. Q: Who has the obligation to include his or her overseas

    1
    income in the amount of basic income?
    A: Someone who meets both of the following conditions
    shall include his or her overseas income in the amount of
    basic income:
    (1) He or she is a resident of the ROC, and
    (2) His or her filing unit has aggregated both overseas
    income greater than or equal to 1 million NT dollars
    and basic income greater than 6 million NT dollars in
    one year.

    5. Q: What is the definition of a resident of the ROC?


    A: Someone whose circumstances fall under any of the
    following conditions shall be a resident of the ROC:
    (1) A person who has domicile within the territory of the ROC
    and resides within the territory of the ROC; or
    (2) A person who has no domicile within the territory of the
    ROC but resides within the territory of the ROC for a
    period of more than or equal to 183 days during a
    taxable year.

    6. Q: What is the threshold of overseas income to be included


    in the amount of basic income?
    A: The aggregated overseas income per filing unit of
    individual income tax in any year is greater than or equal
    to 1 million NT dollars, the total amount of such income
    shall be included in the amount of basic income in the
    annual income basic tax return.

    7. Q: Is an individual who has overseas income greater than or

    2
    equal to 1 million NT dollars necessarily required to pay
    income basic tax?
    A: No. An individual who has overseas income greater than or
    equal to 1 million NT dollars but his or her basic income is
    less than or equal to 6 million NT dollars is not necessarily
    required to pay income basic tax.

    8. Q: Is an individual who has a basic income greater than 6


    million NT dollars necessarily required to pay basic tax?
    A: No. An individual who has a basic income greater than 6
    million NT dollars is not necessarily required to pay the
    income basic tax. There are several steps further to go.
    (1) Step 1: To figure out the amount of Income Basic Tax.
    The Amount of Income Basic Tax ＝(The Amount of Basic
    Income - 6 million NT dollars) × 20%
    (2) Step 2: To compare with the amount of income basic tax
    and the amount of regular income tax.
    Situation 1:
    The amount of regular income tax* ≧ The amount of income
    basic tax
    An individual shall pay the income tax in accordance with the
    Income Tax Act and does not have to pay the income basic
    tax.

    Situation 2:
    The amount of regular income tax* ＜ The amount of income
    basic tax

    3
    The difference between income basic tax and regular income
    tax can be credited because of income tax paid on the
    overseas income. So the amount of income basic tax payable
    shall be the sum of aforesaid difference minus the income tax
    paid on the overseas income.
    * The amount of regular income tax ＝ Income Tax
    payable in accordance with the Income Tax Act -
    Investment tax credits

    9. Q: Is all of the income tax paid on the overseas income


    credited against the income basic tax?
    A: The amount of tax credited in the calculation of income
    basic tax shall not exceed the amount of the tax increased
    in consequence of the inclusion of such overseas income
    and is calculated as follows:
    The ceiling on the amount of tax credited =
    (The amount of income basic tax - the amount of income tax
    payable) × [(overseas income) / (basic income - the net
    taxable income)]

    10. Q: Is a foreign professional working within the territory of the


    ROC necessarily required to file his or her overseas
    income?
    A: If a foreign professional working within the territory of the
    ROC resides or stays for a period of more than or equal to
    183 days during a taxable year, whereby such person is
    considered to be a resident of the ROC, he or she shall

    4
    include his or her overseas income in the amount of basic
    income in the annual income tax return from 2010 in
    accordance with the Income Basic Tax Act.
    However, under the condition where the income of a
    foreign professional is being taxed at a marginal rate of
    more than 20%, and the amount of income basic tax
    payable is calculated as in Situation 2 of Q8, although he
    or she has overseas income, the possibility of he or she
    being required to pay basic tax should be significantly
    reduced.

    You can find more information about the Income Basic Tax
    levied on individual overseas income via the FAQ Page and the
    Related Laws & Regulations Page on website of the Ministry of
    Finance, ROC. (http://www.dot.gov.tw )

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