Tax bracket versus flat rate

Progressive tax rates apply as individula taxable income increases.

Five, twelve, twenty, thirty and forty percent are the current tax rates for taxable net income from 0 to over NT $4,530,000. When your net income is expected to exceed NT $ 4,530,000 ( US$ 151,000) in a tax year, chances are you already approaching your tax advisor to seek tax saving strategy.

If the interest income accounts for a significant portion of your total income, and you have access to certain type of security indicated in Article 14-1, Income Tax Act, and you are well educated to appreciate the risk of the security, a flat 10 percent tax rate could work for the interests associated with these intruments.

In other words, when you receive interests from the orgnizations issued those instruments, they deduct your income tax upfront, and the remaing income do not count into your progressive income pool, thereby preventing you from entering higher tax bracket.

There is not a volume cap on what portion of your interest income is eligible for the flat rate, as long as you have well informed the risks associated with those instruments.

Be sure to talk to your tax advisor and be well informed of what works for your wealth the best.