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Taxation - Taiwan


Taiwan Individual Income Tax Q&A 23

Q: How would the National Taxation Bureau respond to unpaid tax in Taiwan?
A: There are 3 main points:
1. The Bureau can notice other authorities to freeze from transaction or other rights of the taxpayer’s property which is the same amount as the unpaid tax.
2. If it is believed that the taxpayer has hidden or transferal of properties for tax evasion, the Bureau can request for provisional seizure of his or her properties from the court.
3. If the unpaid tax has reached a certain amount, the Ministry of Justice or the Ministry of Finance can request to bar the person from leaving the country from the Ministry of the Interior National Immigration Agency. However, if the taxpayer has provided collateral, then the restriction can be lifted.

Q: What are the penalties for not filing individual tax return on time?
A: If the Taxation Bureau finds out there are taxable income and unpaid tax, which the taxpayer did not file accordingly, other than a make up payment, he (she) will be fined for less than 3 times of the unpaid tax. However, if the taxpayer makes up the payment before the Bureau finds out, he (she) shall only be charged with an interest.

Q: What are the penalties for missing or under-report tax return?
A: If the tax return has been filed and there are missing or under-report of income, other than the make up payment, the taxpayer will be fined for less than 2 times of the missing tax. If the taxpayer file tax return according to the formula provided by the Bureau on time, there should not be any penalties even if there are missing or under-report tax.

Q: What are the penalties for not paying the tax on time?
A: A 1% supplementary payment will be added every 2 days upon the payment deadline. However, if the payment cannot be settled due to majeure force or other reason that the taxpayer cannot be blamed, then the taxpayer should report to the Bureau within 10 days after the cause has been removed and apply for payment extension and supplementary payment exemption.

Q: What are the penalties for tax withholder of not withholding the tax?
A: If the tax withholder does not withhold the tax according to the Income Tax Act Article 88, besides paying make up payment for the tax that should be withheld and submitting the withholding receipt, there will be a fined for less than a double of the withheld tax. If the tax withholder does not pay the make up payment or does not submit the withholding receipt, the above mentioned fine will be increase to 3 times. However, if the tax should be withheld is under TWD3,000, with make up payment and receipt submitted within deadline, no penalty will be made.