An Empirical Research of the Income Tax of Payments Derived From Non-Resident Enterprises Performing Services outside R.O.C.
Date Issued
2016
Date
2016
Author(s)
Wang, Yu-Li
Abstract
In the trend of the economic globalization, it’s more common to see cross-country transactions. Espically in the rapid development of infomation technology, like telephone, fax and internet, many transactions can cross the physical border easily. There are no more needs to physically presence of both sides to complete a transaction. Take “labor services” for example, in the past, if someone needs non-resident enterprise to perform service, in most cases, the buyer must send some people to foreign contry, or non-resident enterprise send their people to Taiwan. But in today’s world, resident service buyer can send basic informations and requirments needed for the service to non-resident enterprise by technology, and then non-resident enterprise can perform the service by itself in foreign contry based on the information they received., finally send the result report back by technology. There’s no people’s move needed. Furthermore, the exchange of the information for both sides can be more directly to know the status of service have been performed, to correct and interact. Based on the Income Tax Law article 3, non-resident enterprises (which refers to the enterprise doesn’t locate their headquater in R.O.C.) only need to pay taxes for the “Income from R.O.C. source”. And the rules to determine source of income is located in article 8. In the past, the interpretations of non- resident enterprises income derived from service are stable (place of performance). But after 1999, the Ministry of Finace started to change their own perspective, which leads to more arguments between them and taxpayers. Unfortunately, the court’s decisions are also unstable, either. Until the Supreme Administrative Court announce their unified description in the income derived from labor services performed by non-resident enterprise in May 2010, the court’s judgements finally became stable. But this unified interpretation did not settle down the disputes between tax collectors and taxpayers in this kind of issues. This work’s main purpose is to collect OECD and UN modules and some foreign regulations about the issue, and comprise the decisions done by Taiwanese Ministry of Finace and administrative courts to point out the issue of income derived from non-resident enterprises performing service outside of R.O.C. in Taiwan’s income tax. Hope this work can start the communications between tax collectors, taxpayers, courts and more, to finalize a decision which can effectively reduce dispute, and much more forseeable for both sides.
Subjects
Income Tax
income derived from (labor) service
international taxation
tax treaty
double taxation
foreign enterprise
non-resident
SDGs
Type
thesis
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