How to Process Tax Withholding and Filing When Lease Agreements Stipulate Tenants are Responsible for Withholding Tax on Rent and Supplementary Premium for National Health Insurance
When a company signs a lease agreement with a landlord that requires monthly payment of rent plus the landlord's withholding tax and National Health Insurance supplementary premium, how should the total rent payment and withholding tax be calculated?
The National Taxation Bureau of Kaohsiung, Ministry of Finance explains that when profit-seeking enterprises, organizations, and other withholding agents rent houses and agree to bear the withholding tax and National Health Insurance supplementary premium, these amounts are essentially part of the consideration paid for the leased house. The withholding tax and supplementary premium should be included in the total payment amount when processing withholding tax and filing withholding tax statements.
The Bureau provides the following example: Company A rents a house from Landlord A, who is a domestic resident. The lease agreement stipulates that Company A shall bear the 10% withholding tax and 2.11% National Health Insurance supplementary premium. If Landlord A receives an actual monthly rent of NT$40,000, Company A should calculate the withholding tax based on the actual total rent payment of NT$45,511〔40,000 ÷（1-10%-2.11%）〕. The monthly withholding tax amount would be NT$4,551（45,511 × 10%）. This tax must be paid to the National Treasury by the 10th of each month for the previous month's withholding tax （however, if the withholding tax amount is less than NT$2,000, no withholding is required）. The Withholding and Non-withholding Tax Statement must be filed by the end of January of the following year.
The Bureau reminds withholding agents that when renting houses, if the lease agreement stipulates that the tenant shall bear related expenses on behalf of the landlord, these amounts should be considered as part of the rent when calculating the total rent payment. The withholding agent must withhold taxes and file withholding tax statements according to law. For any queries regarding withholding regulations, please dial the free service hotline 0800-000-321 for more information or go to the Bureau’s website （https://www.ntbk.gov.tw/eng） to make an inquiry online through the national tax smart customer service “National Tax Assistant.”
Provided by: First Individual Income Tax Section
Contact person: Section Chief, Mr. Feng. Phone number: （07）7256600 ext. 7270
Contributor: Ms. Lee. Phone number: （07）7256600 ext. 7222
Reference URL：https://www.mof.gov.tw/Eng/singlehtml/f48d641f159a4866b1d31c0916fbcc71?cntId=349a107aa5754463b9efe8db857af164