Owing to the economic downturn and tax reforms, people may pay less income tax and delay the payment for up to three months this year, the Ministry of Finance said.
People are scheduled to file their income tax between yesterday and June 1 for salaries, bonuses, dividends and other forms of income earned last year.
The government imposes progressive income tax rates, ranging from 6 percent to 40 percent, on the taxable income of individuals in accordance with the Income Tax Law (所得稅法).
Sheu Yu-jer (許虞哲), head of the ministry’s Taxation Agency, said there were 5.37 million households in Taiwan and they may either file their tax returns online or go through the procedure at tax offices nationwide.
People who earn NT$410,000 (US$12,338) a year or less are subject to 6 percent income tax, but those with an income of NT$4.09 million a year or more have to pay tax at 40 percent.
The Legislature in December approved a bill that provides higher tax thresholds starting this year.
The standard deduction before paying income tax stands at NT$73,000 for single people and NT$146,000 for married couple. The deduction for wage earners is NT$100,000, while the disabled qualify for an extra NT$100,000. Families are granted an extra NT$25,000 for each member in college education.
Many believe the increased deductions were implemented as a tradeoff to subdue resistance to cuts in inheritance and gift taxes, though finance ministry officials insist they were implemented to ease the financial burden on taxpayers.
In addition, people are entitled to an extra NT$24,000 deduction to cover national pension fees and those paying for private education may have the entire amount deducted from their taxable amount, Sheu said.
The unemployed, those close to the poverty line, workers receiving vocational training subsidies and those on unpaid leave may apply to postpone paying their income tax for up to three months, the ministry said.
People with a tax bill of NT$20,000 or less may pay their tax at convenience stores along with a declaration form that can be downloaded from the ministry’s taxation Web site.
Some banks allow customers to use their credit cards to pay the income tax and there are differing service fee rates depending on the sum involved.
The ministry encouraged people to file their tax return as early as possible, saying the earlier returns are received the quicker any rebates would be processed.
Meanwhile, the Cabinet’s Tax Reform Committee yesterday threw its support behind a proposal to introduce a tonnage tax system, in conjunction with a business income levy, when calculating the profits of shipping companies for taxation purposes.
The committee said in a statement that shipping companies may elect to have their profits charged in line with the tonnage tax after the reform is written into law.
Vice Premier Paul Chiu (邱正雄), convener of the committee, said the reform would bring the nation in line with global trends and help facilitate the return of Taiwanese liners that have opted to carry foreign flags for tax reasons.
Chiu said South Korea, the US, the UK, Japan, Ireland and Denmark have all introduced the tonnage levy.
The committee suggested that the nation study the South Korean model when setting the rates, as they are lower and therefore more competitive.
Under the reform plan, companies that opt to pay the tonnage tax would have to stick to the regime for 10 years.
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