Tiawan government remittance
Thread poster: CindyFay
CindyFay
Local time: 11:52
Jun 4, 2015

I’m hoping to get some feedback from others experiences with this. We were recently shorted on an invoice for a customer by 20%. It was for a job for a company in Taiwan. The customer indicates: “In the country of Taiwan, we are required by law to withhold 20% and remit to the government.”

Two questions:
1. Has anyone ever run into this with Taiwan or any other countries?
2. Were you given any information up front on these taxes before doing the job(s)?

Thank you.


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Jean@LA  Identity Verified
United States
Local time: 09:52
English to Chinese
+ ...
Yes, this tax is required by the government, but... Jun 4, 2015

the company in Taiwan should have told you upfront out of professional business practice and courtesy. What you might want to check with the company is that whether this remittance will be partially or totally returned after the tax is filed and settled next year.

Good luck.


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Sheila Wilson  Identity Verified
Spain
Local time: 17:52
Member (2007)
English
+ ...
This comes up again and again Jun 4, 2015

It's happening around the world. And 99% of the cases we hear about (if not 100%) are erroneous, mistakes caused by frightened business people being hopelessly confused about their own country's tax laws.

It's quite likely that they do have to pay 20% of the invoice amount of a locally-based freelancer directly to the tax authorities. The same happens here in Spain. But it most certainly does not apply across national boundaries.

It isn't up to your non-domestic clients to pay your taxes, when you don't owe a cent to their country. You pay your taxes in your own country (presumably), not in all your clents' countries. Heaven forbid! (I invoice clients in a good 20 countries per year and I certainly don't want to get involved in all their tax administrations!)

I personally think you need to contest this immediately. Waiting for them to give it back, or expecting the two governments to sort it out between themselves is like waiting for a star to fall in your lap.


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Li-Hsiang Hsu  Identity Verified
Taiwan
Local time: 18:52
Member (2014)
French to Chinese
+ ...
Yes, it's a tax on foreign workers' earnings Jun 5, 2015

This mesure is very discriminatory and protectionist. Be sure to raise your rate when you quote a Taiwanese company.

[Edited at 2015-06-05 04:35 GMT]


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Thomas T. Frost  Identity Verified
Member (2014)
French to Danish
+ ...
PWC leaflet Jun 5, 2015

I tried to post about this yesterday, but it somehow disappeared.

This PWC leaflet explains a lot for anyone with patience enough to plough through it.

https://www.pwc.tw/en_TW/tw/publications/assets/taiwan-pocket-tax-book-2011.pdf

It looks as if such a tax may really be required in Taiwan.

Quite outrageous.

If it's a legally required tax, you may be able to use it in your country of residence when filing your tax return to obtain a tax credit corresponding to the tax paid in Taiwan, depending on your national tax law and the double tax convention between your country of residence and Taiwan. In the best case, you may recover it all, and in the worst nothing.

To compensate for the 20 % by increasing your rate, you need to add 25 % to your standard rate.

Example:

You want to be paid $100.
You need to tell them the price is $125.
20 % of $125 is $25, leaving $100 net.


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Tiawan government remittance

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