– Penalty Non-Compliance with FATCA Penalties (US$60,000 Max) A guide to Brazilian tax aspects with everything you need to know to live in Brazil, Taiwan was one of the stopping points, but Taiwan eventually gave in and signed the FATCA agreement at the end of 2016 – before the agreement was signed, Taiwan had reached a “substantive” agreement in 2014. A person is also considered non-resident if he or she stays in Taiwan for more than 90 days but less than 183 days. The individual is taxable on the remuneration of benefits in Taiwan and a withholding tax of 18 per cent by 2020. A non-resident tax return should be filed. Any agreement (with the exception of the agreement with Italy) provides an exception to the territorial rule, which aims to minimize disruptions in the career of workers whose employers temporarily send abroad. Under this exception for “self-employed workers,” a person temporarily transferred to work for the same employer in another country is covered only by the country from which he or she was seconded. A U.S. citizen or resident, for example, who is temporarily transferred by a U.S. employer to work in a contract country, remains covered by the U.S. program and is exempt from host country coverage. The worker and employer only pay contributions to the U.S. program. It should be noted that Taiwan has tax agreements with many other countries, but not with the United States.
Paying double social security contributions is particularly expensive for companies that offer “tax compensation” to their expatriate workers. A company that sends an employee to work in another country often ensures that the assignment will not result in a reduction in the employee`s after-tax income. As a result, employers who have tax compensation programs generally agree to pay both the employer`s share and the share of the host country`s social security contributions on behalf of their transferred workers. Most U.S. agreements eliminate dual coverage of autonomy by allocating coverage to the worker`s country of residence. For example, under the US-Swedish agreement, an American citizen living in Sweden and living in Sweden is covered only by the Swedish system and is excluded from US coverage. For a subject who receives a tax liability, the Taiwanese employer must withhold the tax due at the time of payment at prescribed rates and source procedures and declare and pay the tax withheld under the provisions of the tax law. Taiwanese employers are not subject to any payroll tax. Transfer pricing – Taiwan has transfer pricing rules that require transactions between nearby parties to be carried out under arm length conditions. The transfer pricing guidelines contain a specific definition of related parties, which includes direct and indirect control and control of a board of directors. Taiwanese tax authorities accept the following transfer pricing methods: comparable uncontrolled pricing, comparable profits, profit fraction or other methods proposed by the Ministry of Finance. Tax payers are required to maintain documentation of transactions with related parties that must be attached to the corporate tax return.
Tax authorities can adjust the incomes of taxpayers whose controlled transactions are outside acceptable areas and sanctions may be imposed for non-compliance with the principle of the length of arms and documentation requirements. Pre-price agreements are possible. Low capitalization – The executive yuan has drafted a bill that would introduce thin capitalization rules, but the law has not been passed by the legislative yuan. Nevertheless, a debt of 1/3 is recommended. Controlled foreign companies – Although Taiwan does not currently have a CFC regime, the rules on CFCs are being discussed.