The Ministry of Finance has proposed amendments to certain provisions of the Income Tax Act, which have been approved by the Executive Yuan and forwarded to the Legislative Yuan for deliberation. The Legislative Yuan passed the third reading on the July 15th 2024.

The Ministry of Finance explained that the key points of the proposed amendments are as follows:

The scope of withholding agents has been revised. Instead of the responsible individuals, such as the business owner or the head of the unit responsible for withholding in organizations, the duty will now fall on the business, organization, or group itself.

A new provision has been added regarding the deadlines for the payment, reporting, and issuance of withholding certificates for non-residents. If these deadlines coincide with a national holiday of three consecutive days or more, an extension of five days will be allowed.

The penalties for failing to report or issue withholding certificates as required have been revised. The tax authority is now granted discretionary power to impose varying levels of penalties within a certain range based on the severity of the specific violation.

The Ministry of Finance further explained that currently, the responsibility for withholding income such as salaries and interest lies with the responsible individuals of the company or the heads of units in organizations. Following this amendment, the business, organization, or group itself will be the withholding agent, aligning responsibilities accordingly. Additionally, when a withholding agent pays income to a non-resident (an individual or foreign business not residing in the country), the original requirement was to handle withholding, reporting, and issuing certificates within 10 days of the payment date. The amendment introduces a provision that if this period coincides with a national holiday of three consecutive days or more (such as the Lunar New Year), the deadline may be extended by five days, reducing the pressure and burden on their operation time. Furthermore, if withholding agents fail to report or issue certificates as required, penalties will no longer be fixed amounts or fixed ratios (multiples) of the payment amount (withheld tax amount). Instead, the tax authority will impose penalties of varying degrees within a certain range based on the severity of the violation, helping to protect the rights of the withholding agents.