As the lunar year comes to an end, companies from all sectors have successively started to hold year-end party. With respect to prizes won by employees at the year-end party, National Taxation Bureau of Kaohsiung, Ministry of Finance hereby reminded tax withholders not to forget to withhold the tax therefor!
According to Income Tax Act, tax withholders are obliged to withhold tax on income from lotteries and the obligations are as follows:
1. Where the taxpayer is a resident of the Republic of China (R.O.C.), the income shall be taxed at 10% and the payment should be effected to the national treasury on the 10th of the next month. Nevertheless, if the withholding tax amount of a winning prize is less than NT$2,000, the tax shall not be withheld. If the total amount paid to a taxpayer during a year is less than NT$1,000, the non-withholding tax statement may be exempted.
2. Where the taxpayer is a non-resident of R.O.C., the income shall be taxed at 20% and the payment should be effected to the national treasury within 10 days from the date of withholding.
The Bureau made an example: Company A held the year-end party on December 15, 2021 and purchased ten iPhone 13 mobile phones as the lottery prize. Each iPhone 13 was purchased at NT$35,000 and the 10 employees who won the prize were all residents of the R.O.C.. Therefore, Company A shall withhold the tax of NT$3,500 (NT$35,000 x 10%) per winner; the payment shall be effected to the national treasury before January 10, 2022; and withholding statements should be filed to the taxation Bureau before February 7, 2022.
The Bureau indicated that the filing of withholding and non-withholding tax statement, trust property income statement and dividend statement of 2021 would start from January 1, 2022. As the Chinese New Year holidays start from January 31, 2022, the filing period would be extended to the next working day, which is February 7. As for non-residents' income tax, the withholding and non-withholding tax statement should be filed within 10 days from the date of withholding.
The Bureau further pointed out that withholding and non-withholding statements may be filed online, at the counter or via electronic media. The e-filing can be made 24 hours a day and on the holidays without limitation of time and location, helping tax withholders to save time and improve efficiency. Tax withholders can search ''The e-Filing and Tax Payment Service of the Ministry of Finance” (https://tax.nat.gov.tw) to download and install the ''Tax Withholding Statement Data E-Filing System''(for all incomes, including those from trust property) software to file your statements online. Please well-use it and file your statement as early as possible.
The Bureau reminded that, in case of finding any mistake or error on the filed documents before the deadline, an amendment to the statement may be made online. Nevertheless, it is important to note that the data after the amendment will cover the old data. Therefore, when making an amendment to your statement, it is a must to upload the ''entire'' and accurate data to avoid further mistakes or missing data. Your amendment procedure will be deemed as complete only after you have received a ''successful filing'' message. In case of having any question regarding the filing of the statement, please dial the Bureau's free hotline 0800-000321. In case of having any question regarding the filing software, you can dial 0809-085188 to contact Trade-van Info Services.
Contact: Miss Lee, Revenue officer of the Second Examination Division