Update on Withholding Tax for Non-Residents

The new circular (SAT Announcement [2017] No. 37) comprise following key changes:

  1. Canceled the requirement for the payer to register business contracts within 30 days after the contract with non-resident is signed.
  2. The calculation method of property transfer income is clarified.
  3. Canceled the requirement for the foreign payee to declare withholding tax within 7 days if the payer did not do the withholding.

Lee & Lee Associates Insights:

1) Although the requirement for contract filing is canceled, the payer still needs to maintain withholding tax ledgers and contract records for future tax audit purpose.
2) However, for non-residents doing construction project or providing labor service, the contact still needs to be filed to tax authority.