Time for Trustee to Withhold and Declare Beneficiary's Income

01/01/2013

---

Article 92 of the Income Tax Act stipulates that in respect of a non-resident individual or a profit-seeking enterprise without a fixed place of business in the Republic of China ("Non-Resident") but having income subject to withholding tax, the tax withholder, shall within ten (10) days from the date of withholding, effect payment to the national treasury of all the taxes withheld, make out withholding statements and issue them to the taxpayer after submitting them to the competent tax authority for verification ("Generally Withholding Requirements for Non-Resident"). In respect of a Non-Resident beneficiary having income subject to withholding tax, a trustee may be perplexed as to whether he/she/it should comply with the Generally Withholding Requirements for Non-Resident.

On 25 October 2012, the Ministry of Finance issued a tax ruling to confirm that in respect of a Non-Resident beneficiary having income subject to withholding tax, the trustee need not comply with the Generally Withholding Requirements for Non-Resident. The trustee shall, by the last day of January of each year (in the case that three consecutive national holidays occur in January, the deadline shall be extended to February 5), calculate the amounts of each type of income from the Non-Resident beneficiary in the preceding year, effect payment to the national treasury of all the taxes withheld and make out withholding tax report and submit it to the competent tax authority. Also, the trustee shall issue withholding tax statements to each Non-Resident beneficiary by February 10 of each year (in the case that three consecutive national holidays occur in January, the deadline shall be extended to February 15).