The Hired Foreign Worker Who Left the Country for Vacation is Not Able to Come Back for Work. How to Withhold His/Her Salary?
Mr. Wu called and asked about the following question: The Company A started to hire foreign workers who have 2 years working visas in January 2018. One of them was paid by NT$23,000 every month from January to May and was filed as a resident for this year. But since the salary paid did not reach the threshold, he/she was paid without withholding. However, this foreign worker went back home in the beginning of June for vacation and indicated that he/she was not able to come back for work due to family reason. Under the circumstance, he/she was changed to a non-resident for the taxable year since he/she did not stay for 183 days this year. How to adjust the withholding filling for the salary paid?
National Taxation Bureau of Kaohsiung, Ministry of Finance indicated, whether the foreign workers who came to our country for work should be filed as a resident or non-resident, the tax withholder (the head of profit-seeking enterprise in the country) may judge by the period of stay specified on their visas or Alien Resident Certificates. The one who is permitted to stay in the country due to work may be filed as a resident from the beginning if they have stayed over 183 days for thetaxable year. If they have left the country with no intention of coming back and the days they actually stayed in the country is less than 183 days, they may then be withheld by rate for non-resident and taxed for the difference.
The Bureau further indicated, in this case, the foreign worker was paid for NT$23,000, and judged by his/her 2 year working visa, he/she was filed as a resident. But since his/her monthly salary did not reach the withholding threshold, the salary from January to May was thus paid without withholding. However, this foreign worker left the country and went back home for vacation in the beginning of June and is not able to come back for work for family purposes. Due to the actual days of his/her stay in our country is less than 183 days, he/she should be classified as a non-resident. In accordance with paragraph 1.2.2 of Article 3 in Standards of Withholdings Rate for Various Incomes, if the total salary paid to a non-resident is lower than 1.5 times of the Basic Wage ( The Basic Wage ratified by Executive Yuan for year 2018 is NT$22,000), the withholding tax rate is 6%. Therefore, in this case, the company A should make up the payment of NT$6,900 (NT$23,000 x 6% x 5 months) for the withholding tax of salary paid from January to May of 2018 and file non-resident withholding statement to local branch of National Taxation Bureau. When filing, please don’t forget to file with a copy of that foreign worker’s passport or Alien Resident Certificate to prove that there was nothing wrong to file as a resident previously, so as to prevent from being fined by National Taxation Bureau according to Article 114 of Income Tax Act for having to make up the withholding tax and make another filing for withholding statement due to change of identity after the departure of the foreign worker.
The Bureau urged the tax withholders to comply with the relevant regulations and call the number 0800-000-321 if there are any questions.
Contact: Mr. Tzeng, the Revenue Assessor of Second Legal Affairs Division.
TEL: 07-7256600 ext.8708