(1) When a company (or a cooperative) makes distribution on dividends or profits of the year 1998 or of the following years to its resident shareholder, the company should prepare a “Dividend Statement” for him/her to file his/her tax return. The resident could choose to incorporate the total amount of dividends and earnings into consolidated income to calculate the tax based on progressive income tax rates, and the tax payable may be offset by a tax credit of 8.5% of the total amount of the dividends and earnings (the credit ceiling set at NT$80,000 per year per income tax return).
The resident could opt to calculate the tax payable separately in accordance with the single tax rate of 28% on the total amount of the dividends and earnings. Such tax payable shall be aggregated to the consolidated income tax return, and computed the tax balance due (refund) amount.
(2) When the above-mentioned dividends or profits are being distributed to its non-resident shareholder, the company should issue him/her a “Withholding & Non-Withholding Tax Statement.” If the non-resident shareholder continues to stay in the R.O.C. for 183 days or more in the same taxable year, he/she (on thus attaining the status of resident) shall ask the company to amend the “Withholding & Non-Withholding Tax Statement” to a “Dividend Statement” for the filing of the tax return.