National Taxation Bureau of Kaohsiung, Ministry of Finance expressed that, if a withholding agency (ex., profit-seeking business, organizations or institutions) rents a house from an individual and if it is agreed that the lessee shall pay lessor’s withholding tax and supplementary insurance premiums of the National Health Insurance, the withholding tax and supplementary insurance premium payable shall be regarded as rent payment and be incorporated into the calculation of total payment. The said withholding tax shall be withheld and be issued with a withholding certificate, and then submitted to the tax collection authority.

      The Bureau explained that, if the lessee and lessor agree that the lessee will fulfill the lessor’s tax liability, pay expenses derived from the repair or expansion of the leased property or fulfill the lessor’s other debt liabilities on behalf thereof, then the price paid by the lessee to fulfill this agreement shall be the consideration for the payment of the right to the leased property. With the same nature as rent payment in cash, the said payable shall be incorporated into the calculation of total rent payment. Therefore, if the lessee and lessor have agreed on any of the aforesaid terms, the withholding taxpayer shall calculate the total of rent accurately and withhold the tax according to the prescribed withholding rate. If the income receiver lives within the territory of the R.O.C., the tax withholder shall pay the withheld tax to national treasury before the 10^th of the following month and file the withholding tax statement before the end of next January.

      The Bureau made an example: Company A rent a property from a domestic resident A in 2022 and the lease contract has specified that 10% of the total amount will be withheld for taxpayment and 2.11% of the total amount will be borne by Company A for the payment of Party B’s supplementary insurance premiums.  Although the domestic resident A only charges NT$50,000 each month, the person-in-charge of Company A (i.e. the tax withholder) should pay a total amount of NT$56,889 (NT$50,000/ (100%-10%-2.11%)) each month to withhold the tax. That is, the tax withholding amount shall be NT$56,889 (NT$56,889*10%) and be paid to National Treasure; and the withholding tax statement shall also be filed accordingly.

Contact: Ms. Lee, Revenue Officer of the Second Examination Division

TEL: 07-7256600 ext.7251