MOF to Further Ease Taxation on Foreign Employees in Taiwan

Taipei, Sept. 9, 2008 (CENS)--The Ministry of Finance (MOF) has recently drafted ways to ease taxation on foreign employees here. Such measures include allowing businesses to file as corporate expenditures water, power, gas, telephone, and cleaning fees spent on foreign employees, with foreign employees having to combine such payment with salaries when filing taxes, except those regarded as "professionals." The measures become effective on January 1, 2009.

As early as November 1981, the MOF stipulated that household-use power and telephone bills, cleaning charge and consumer goods paid to foreign workers by employers may not be categorized as corporate expenditures when businesses prepare financial statements during tax filing; however, the MOF has decided to revise such rules to attract foreign "professionals" to work in Taiwan.

Core of the new rules:

--Hydro, power, gas, cleaning, and telephone bills, as well as consumer goods paid by employers as part of foreign employee recruitment may be classed as corporate expenditure, but must be listed as part of employee salaries for tax filing;

--Furniture and/or other durable goods bought by businesses for foreign employees' use may be listed as corporate assets, whose purchase price need not be listed as part of employee salaries for tax payment; and

--Taxes paid by businesses on behalf of foreign employees may not be listed as operating expenses or loss, with foreign employees still liable for income taxes as required.