Chinese nationals making a steady income and staying in the country for a consecutive 183 days in a year would be required to pay income taxes just like other residents, under a measure scheduled to be approved by the Cabinet on Feb. 28 and to be implemented on March 1.
PRC nationals falling under the new rule would have to file this year's income taxes before July next year.
According to a Cabinet official who asked not to be named, the measure seeks to make the tax system fairer and more consistent.
"It's outlandish to apply a different rule to Chinese nationals in terms of taxation," the official said. "While Chinese nationals are considered foreigners, the income taxes they pay are not on a par with those paid by other foreigners."
Currently, PRC nationals earning a steady income or owning a business here have 10 percent to 15 percent of their monthly incomes deducted, regardless of the length of their stay. They are not eligible for tax rebates since they do not have to file income taxes at the end of the year.
Under the new measure, Chinese nationals making a steady income and staying here for a consecutive 183 days in a year would be levied the same income taxes as other residents. It would also apply to Chinese companies, groups or institutions setting up an office or agent here.
Those failing to stay here for a consecutive 183 days and failing to set up an office or place an agent here would be levied the same income taxes as non-residents or business proprietors without long-term operations here.
According to the Income Tax Law (所得稅法), residents with a steady income or a fixed business are subject to having 10 percent of their monthly salary deducted as income tax. Those whose incomes contain commissions should also pay 10 percent of their commissions in the form of income tax. Those winning a lottery or other prize money worth more than NT$2,000 should pay 15 percent as tax.
Non-residents or business proprietors without a fixed business here should have 20 percent of their monthly salary deducted as income tax. Those whose incomes contain commissions should pay 20 percent of their commissions as income tax. Those winning a lottery or other prize money worth more than NT$2,000 should pay 20 percent of the income as income tax.
The measure would be part of revisions to the Statute Governing the Relations between the People of the Taiwan Area and the Mainland Area (
The amended statute says that Chinese nationals, companies, groups or institutions making a steady income in Taiwan should pay income taxes.
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