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❖ Q&A for the Income Basic Tax

Answer:

Someone whose circumstances fall under any of the following conditions shall be a resident of the ROC:​​​​

1、A person who has domicile within the territory of the ROC and resides within the territory of the ROC; or

2、A person who has no domicile within the territory of the ROC but resides within the territory of the ROC for a period of more than or equal to 183 days during a taxable year.

Answer:
The following items are included in the calculation of the amount of basic income:​​​​​​

1、Net taxable income:
The net taxable income is calculated in accordance with the Income Tax Act (please refer to the individual income tax return).

2、Total amount of dividends and earnings which the taxpayer chooses to compute separately from his/her gross income with the single tax rate.

3、Overseas income:
Income, which is derived from sources outside the R.O.C. and is excluded from gross consolidated income, as well as income which is exempted in accordance with Paragraph 1, Article 28 of the Act Governing Relations with Hong Kong and Macau.
However, if the aggregate of the two aforementioned sources of income in a filing unit is less than NT$1,000,000, it may be excluded from the basic income; otherwise, it shall be filed in the full amount of the aggregate income mentioned above.

4、Life and annuity insurance payments:
Insurance payments received by the beneficiary, on condition that the beneficiary and the proposer are not the same person and that the life insurance policy and annuities are contracted after this Act came into force. However, in the case of payment made upon the death of the insured person, the part of which aggregate of payments made in a filing unit is equal to or less than NT$33,300,000 may be excluded from the basic income in a calendar year.

5、Income derived from transactions of securities:
Beneficiary certificates of privately-placed securities investment trust funds.

6、Non-cash donations or contributions:
The amount of non-cash donations or contributions deducted from the gross consolidated income of the individual income tax return.

7、The amount of income or deduction which is entitled to reduction, exemption or deduction from the consolidated income tax as may be provided by laws which may be promulgated after the implementation of this Act and thereafter announced by the Ministry of Finance.

Answer:
The Executive Yuan has announced that the income basic tax levied on individual overseas income shall come into force on 1st January, 2010 in accordance with Paragraph 7, Article 12 of the Income Basic Tax Act.
Answer:
Someone who meets both of the following conditions shall include his or her overseas income in the amount of basic income:​​​​​​

1、He or she is a resident of the ROC, and

2、His or her filing unit has aggregated both overseas income greater than or equal to 1 million NT dollars and basic income greater than 6.7 million NT dollars in one year.

Answer:
According to the Income Basic Tax Act, individual overseas income shall be that not derived from the sources in the ROC under the provision of Article 8 of the Income Tax Act and not from the sources in the Mainland Area under the provisions of Act Governing Relations between Peoples of the Taiwan Area and the Mainland Area.
Answer:
To facilitate the calculation and aggregation of individual overseas income, the ten categories of individual overseas income are the same as those derived from sources inside the ROC.
Answer:
The aggregated overseas income per filing unit of individual income tax in any year is greater than or equal to 1 million NT dollars, the total amount of such income shall be included in the amount of basic income in the annual income basic tax return.
Answer:
No. An individual who has overseas income greater than or equal to 1 million NT dollars but his or her basic income is less than or equal to 6.7 million NT dollars is not necessarily required to pay income basic tax.
Answer:
No. An individual who has a basic income greater than 6.7 million NT dollars is not necessarily required to pay the income basic tax. There are several steps further to go.

1、Step 1: To figure out the amount of Income Basic Tax.
The Amount of Income Basic Tax ＝(The Amount of Basic Income - 6.7 million NT dollars) × 20%

2、Step 2: To compare with the amount of income basic tax and the amount of regular income tax.
Situation 1:
The amount of regular income tax* ≧ The amount of income basic tax
An individual shall pay the income tax in accordance with the Income Tax Act and does not have to pay the income basic tax.
Situation 2:
The amount of regular income tax* ＜ The amount of income basic tax
The difference between income basic tax and regular income tax can be credited because of income tax paid on the overseas income. So the amount of income basic tax payable shall be the sum of aforesaid difference minus the income tax paid on the overseas income.
 * The amount of regular income tax ＝ Income Tax payable in accordance with the Income Tax Act - Investment tax credits

Answer:
The amount of tax credited in the calculation of income basic tax shall not exceed the amount of the tax increased in consequence of the inclusion of such overseas income and is calculated as follows:
The ceiling on the amount of tax credited = (The amount of income basic tax - the amount of income tax payable) × [(overseas income) / (basic income - the net taxable income)]
Answer: 
If a foreign professional working within the territory of the ROC resides or stays for a period of more than or equal to 183 days during a taxable year, whereby such person is considered to be a resident of the ROC, he or she shall include his or her overseas income in the amount of basic income in the annual income tax return from 2010 in accordance with the Income Basic Tax Act.
However, under the condition where the income of a foreign professional is being taxed at a marginal rate of more than 20%, and the amount of income basic tax payable is calculated as in Situation 2 of Q8, although he or she has overseas income, the possibility of he or she being required to pay basic tax should be significantly reduced.

 

Last updated：2021-03-31
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