The National Taxation Bureau of Taipei, Ministry of Finance (hereinafter referred to as NTBT) stated that salaries of dispatched employees, derived from services rendered in Mainland China, must be reported in these employees' annual income tax returns and pay any relevant taxes, in accordance with Paragraph 1, Article 24 of the Act Governing Relations between the People of the Taiwan Area and the Mainland Area. Moreover, any relevant tax payments paid in Mainland China regarding the aforementioned salaries may be credited against income tax payable. If the tax authority discovers any omitted income, delinquent tax payments will be issued and related fines, based on the delinquent amount, will be issued accordingly.

NTBT provides the following example: Mr. A, who reported Year 2023 individual income tax returns with NTBT, was assigned to work in Mainland China in 2023. He received relevant salary income equivalent to NT$1,500,000 and paid income tax in Mainland China. However, he failed to consolidate his income in Mainland China and in Taiwan for Year 2023 income tax returns. Mr. A mistakenly believed that since no information was shown upon the Enquiry about Data on Various Income via the Citizen Digital Certificate, he had no obligation to declare this income derived from Mainland China. However, income information made available to taxpayers regarding the Enquiry do not include income from sources in Mainland China. Moreover, the Enquiry is for reference only; if taxpayers have income other than the sources the Enquiry can provide, taxpayers still have the obligations to declare it in accordance with the aforesaid law. Therefore, Mr. A needed to pay NT$300,000 tax due for failure to declare his salary income in Mainland China as required, and also a related fine as well, pursuant to Article 110 of the Income Tax Act.

NTBT would like to remind taxpayers that income derived from sources in Mainland China must be reported together with income derived from sources in Taiwan; otherwise, relevant penalties may be imposed.

(Contact: Ms. Chen, Head of Legal Affairs Division; Tel: +886-2-2311-3711 ext. 2071)