Being an American Expat abroad can be a scary prospect when it comes to taxes. Worldwide banks have implemented FACTA reporting which means that big brother knows how much money you have overseas for accounts you opened using your American passport. Also, the USA is one of the few countries that exercises a worldwide tax system. Not to mention, for tax year 2017 the individual mandate for health insurance is still in effect, so if you don’t declare to the government that you were out of the country, you’ll be slapped with a fine for not having health insurance.
But don’t let those things get you down! The overseas exemption is pretty high (102,000 USD as of 2017) and if you make more than that you should be investing some money into to a professional to do your taxes for you anyway. If you are making lower than that, filing your taxes is easy!
You may try to file taxes online using Turbo Tax or something similar, but once you declare you have an overseas bank account, you will run yourself into trouble. The tax software will only be able to process this if you pay an extra $50 or something for the “professional version.” Who wants to pay $50 on a tax form that you are declaring nothing on, right?
The simple and free solution is to send in your tax form via pencil and paper. The government has made this relatively simple for us foreigners abroad. And they give us an extra 3 months to file! Below is a rough guide on completing your taxes via pencil and paper from overseas.
Paper and Pencil Tax Filing Guide
Disclaimer: I am not a professional in US tax. Below is simple a guide that follows the tax instructions given by the IRS. If you have complex overseas tax issues, I would suggest you seek professional advice. If you file yourself, you need to read the IRS instructions carefully and make sure you do not misreport anything. I cannot take responsibility for any tax misfiling on your part..
With that in mind, I am going to assume that you are:
I will walk you through the following 6 steps:
Step 1: Fill Out Schedule B of Form 1040
Yes, before you even start on Form 1040, you need to begin with Schedule B of Form 1040. This is because you have a foreign bank account; you must declare it as well as other foreign assets. Because of FACTA, the US has forced banks worldwide to share the account information of American citizens. Big brother knows, so you might as well declare.
Click here for Schedule B instructions and here for the Schedule B itself. Be sure to print it out and read the instructions carefully.
Filing taxes in a foreign country can be a scary prospect. However, Taiwan makes it easy by providing many tools and resources such as the E-file system. This is not a comprehensive guide, but is written to help give you an idea of how to file taxes online and avoid unnecessary confusion.
A complete guide to the system can be found here although the whole thing is in Chinese. Here is a simple guide they have provided in English.
Filing online will require a basic understanding of Chinese characters (at least your own name, address, etc.). If you know no Chinese, either get a friend to help you or just file in person at the Tax office. Filing in person doesn't take long either, but it may be far away and you will have to wait in line. You can also hire an accounting firm or law firm to help.
For our full FAQ regarding income tax for foreigners in Taiwan, click here.
Okay, let's get started. The first thing you need to do is download the E-filing software here.
After downloading, go ahead and install the thing.
Some strange things may happen after you download:
1. There are weird symbols instead of Chinese characters.
Okay, now you are ready to login. You have five options:
In order to login via health card, you need to register a password online here. You need a card reader as well. The website should automatically recognise your card. All you need to do is type in your ARC number, and type in a password. Also, the process will only be completed once you confirm it by email.
Okay, you are finally in the system. Start filling in your information! This should be pretty straightforward. You also need to fill in the personal info for your dependents.
For your resident days, refer to your passport (this is why you should have your passport stamped and not use the e-gate). If you have been in Taiwan for less than 183 days you are a non-tax resident and pay 18% tax. If you have stayed for more than 183 days, you are taxed according to the tax table. See our tax guide for more info.
Next you should download (import) income and deduction data from the government database. It is the yellow button on the left. If you have already logged via health card or citizen certificate, then there should be no problem. Otherwise you won't be able to download the information.
Once the income info is downloaded, the system will automatically calculate your tax due for you! No math needed!
You will also have to choose between the standard deduction and itemized deduction. Again, for more info see our complete tax guide.
Once you have calculated your refund or tax payable, you can decide how you want to pay or receive payment.
If you have tax payable, you have four options:
If you choose to pay by credit card, make sure you only pay once. If after payment you find a mistake in your filing and try to upload again, it will ask for you to enter your credit card again and charge you again. In this case, you need to choose "pay by cash" and it will print out the remaining balance if your taxes amount increased. If the tax balance became less, call your credit card company and cancel the transaction. If the credit card amount is the same, check "pay by cash" and do not pay, because your card has already been charged.
For the refund, you can either choose:
After you have uploaded your filing and paid, you now need to mail in your supporting documents via snail mail or send them via electronic media (CD/USB).
I would suggest just printing them out.
If you don't have a printer, you may notice that the supporting document list and receipts save in a weird file format, but you can save them via PDF as seen above, and then print them at a 7-11 or copy store.
Look at your list of documents and make sure you have copies of everything they want. They also provide an address of the office near you that you can stick right on an envelope and mail to the tax office. Also, you can check the progress of your filing right from the system (as well as online here).
Still Have Questions?
Please feel free to like, follow, ask questions, comment, and share, to help foreigners in Taiwan everywhere with their tax filing!
Foreword: Please note that this is not a comprehensive list of questions. This is meant to only give a basic overview of Taiwan's business environment to those who have not yet been to there.
What is the corporate tax rate in Taiwan?
20% as of 2018.
What is the VAT rate in Taiwan?
What is the withholding tax rate in Taiwan?
Typically it is 20% for sending funds overseas. For tax treaties, please click here.
For other types of withholding tax (can be 0.1-15). For further information please consult with a tax adviser, such as Grant Thornton Taiwan.
What is the personal income tax like?
Please find our article on the subject here.
Are transfer pricing reports required in Taiwan?
Yes, if your group entity in Taiwan has made over 300 million NTD total annual revenue. For more information, consult with a tax advisory firm such as Grant Thornton Taiwan.
How do you start a Taiwan business/company?
Please see our article on the subject here. There is also a website and book about this subject here. You can also consult an accounting or law firm such as Grant Thornton Taiwan for a price quote on their company setup services.
How much does it cost to start a company in Taiwan?
As much as you need to cover operating costs. If you need to hire foreigners, your paid in capital should be over 5 million NT.
How do you hire foreigners in Taiwan?
You need to have a company with starting capital of 5 million NT or more.
What business licenses are required in Taiwan?
This depends on the business. For food related products and medicine, Taiwan FDA approval is required.
How do I get FDA approval in Taiwan?
You should consult with a law firm for help on this.
Is a corporate secretary required in Taiwan?
Is bookkeeping/payroll required in Taiwan?
Yes. You can use service from a local accounting firm or other provider such as Grant Thornton Taiwan.
What statutory requirements are there in Taiwan?
Labor insurance, health insurance, and pension.
What is the rate for overtime in Taiwan?
This is complicated, but it is at least time and a half for a weekday.
What are Taiwan labor standards?
Please see our article here on Taiwan’s Labor Standards Act.
Does Taiwan have a good talent/labor market?
Yes, there are many bilingual talented people here, and many are underemployed because of lack of opportunity.
How do I find talent in Taiwan?
The best way is to use your connections, but you can also try Taiwan work finding websites:
The most popular work finding website in Taiwan, although the interface is only in Chinese (sorry), job postings can be in English. Its worth checking out, even if you can’t read Chinese (perhaps you can have a Chinese friend help you out).
This is probably the second most popular work finding site in Taiwan, this websites interface is also only in Chinese, although some job postings are in English.
This is a great English based website for English Teaching jobs in Taiwan.
Linkedin has Taiwan job opportunities that are mostly in English.
Other than these, search Google. Who knows what you’ll find.
What are the biggest companies in Taiwan?
Foxconn, TSMC and Pegatron, Quanta Computer, and Cathay Life Insurance are the biggest companies in Taiwan. Other companies include Acer, Asus, and HTC.
What is Taiwan's economic situation like?
Please see our economic FAQ here.
Please like, comment, and share!
Also, feel free to contact us with any specific questions about doing business in Taiwan.
Tax season is here. In Taiwan, taxes must be filed from May 1st to May 31st. As a foreigner, you might be wondering how to file a tax return and what the regulations are. Luckily Taiwan has made it easy by creating an online tax filing system that you can complete from your computer, although you do still have to physically send some forms to the tax office. Let us answer some common questions about tax filing that might come up:
Q: When should I file Taxes?
A: Between May 1st to May 31st. Tax payments are due by June 13th.
Q: What makes me eligible for paying Taiwan taxes (or what makes me a tax resident)?
A: You become a Taiwan tax resident if you stay in Taiwan longer than 183 days, or you have household registration（戶籍） in Taiwan and visit for at least one day. The address in your ARC is not household registration, it's a registration process from the local administrative office (戶政事務所）.
If you stay less than 90 days in Taiwan, you do not have to file taxes, and VAT or sales taxes are reimbursable. If you worked in Taiwan and stayed over 90 days, you need to pay taxes even if your income came from overseas.
If you stayed in Taiwan between 90-183 days, then you need to pay a fixed rate of 18% income tax （your company may have deducted this from your salary already).
If you have Taiwanese dual citizenship and a Taiwanese identity card, then you need to pay taxes if you have stayed in Taiwan for over 31 days. Days are cumulative in a tax year, and it doesn't matter what you came for during these days.
Please note that the day you come to Taiwan doesn't count, but the day you leave does. Because of this, it's a good idea to keep track of the number of days you have been in Taiwan.
Q: What is the income tax rate?/ How much is Taiwan tax?
A: The income tax rate for non-residents is 18% (you can get a tax refund if you pay 18% taxes and then become a tax resident). The tax rate for residents is as follows (source: KPMG):
If you make more than a million Taiwanese dollars per year, it would be best to keep the number of days in Taiwan down to 183 or below if you can.
Q: Are there tax exemptions?
A: Yes, there is an 88,000 NT exemption per dependent, but these dependents need to be in Taiwan. If a dependent is over 70, then the exemption for them is 132,000 NT.
Q: What are the standard deductions?
A: The standard deduction for single taxpayers is 90,000 NT. The standard deduction for married taxpayers is 180,000 NT. If you choose an itemized deduction, you cannot use a standard deduction.
Q: What expenses are deductible?
A: For a list of itemized deductions, see below:
A “Qualified foreign professional” (QFP):
Q: How do I compute tax in Taiwan?/ How do I compute a tax refund in Taiwan?/ How do I calculate Taiwan income tax in Taiwan?
A: Take your gross net salary and subtract applicable exemptions and special/standard deductions (if you use itemized deduction, then you cannot use the personal and married standard deductions). After this, you can see which tax bracket your wage falls into, and you can subtract the progressive difference. Multiply this by the rate of the tax bracket and you will arrive at the amount of tax owed.
Let's say the gross salary for me and my spouse is 1,500,000 NT. I am married and have one child, so I subtract the personal exemption for my family (88,000x3=264,000), subtract the special deduction for salary (128,000), and also subtract the standard married deduction (180,000) ending up at 928,000 NT. This amount falls under the 12% tax bracket (see table above), which is 111,360. Then I subtract the progressive difference for that tax bracket, which is 37,800, ending up at a total of 73,560 NT tax due.
Q: How do I file taxes in Taiwan?
A: You can e-file or go to the tax office in person. Please click here for our e-file guide. If you go in person, word on the street is that it takes less than 20 minutes to file. You can also e-file, and save yourself a trip outdoors (if you are from mainland China there is no e-file option).
Click here to download the e-filing system for foreigners: http://tax.nat.gov.tw/info_IFNen_download.html?id=9#.
When you file with your passport number, use your latest passport, even if the year you are filing for was before you got your new passport.
Q: How do I pay my taxes?
A: You can pay by cash, check, credit card, ATM, bank transfer, or convenience store.
Q: How do I get my tax refund?
A: You can get your refund by check or direct deposit. The later you send your documents the later you get your refund. Click here for more info.
Q: What is the withholding tax rate in Taiwan?
A: This depends on the nature of the payment, as there are many different withholding tax rates for different types of payments. For salaries of non-tax residents, the withholding tax is 18%.
Q: What is the withholding tax rate on dividends for foreigners in Taiwan?
A: The witholding rate on dividends sent to overseas investors is 20% for 2017 and 21% for 2018.
Q: What is the sales tax rate in Taiwan?
Q: What is the hotel tax rate in Taiwan?
A: There is no hotel tax, but it is common for hotels and restaurants to add a 10% service fee.
Q: What is the corporate income tax rate in Taiwan?
A: For 2017 it is 17%, and for 2018 it is 20%.
Q: Is there alternative minimum tax (AMT)?
A: Yes. AMT for overseas income is only effective you are a Taiwan tax resident and overseas income is over 6.7 million NT. The tax is 20% on income above this amount. However overseas income over 1 million NT should still be filed. Pension payments are only taxed for the salary you earned while in Taiwan.
Q: How do I file US Taxes if I am an American citizen or green card holder overseas?
A: Please see our guide on filing taxes as an American Expat living overseas here.
Q: Who should I go to for help with my Taiwan taxes?
A: We recommend Grant Thornton Taiwan; they have an English capable team and years of experience helping expatriates file income tax. You can contact:
Trent Jackson | Manager | International Services Division
Grant Thornton Taiwan
5th Floor | No. 21 Zhongxiao East Road Sec. 6 | Taipei | 11575 | Taiwan, Republic of China
T (office) +886 (0)2 2789 0887 | T (extension) 357
E firstname.lastname@example.org | W www.grantthornton.tw
Other useful articles on this subject:
Grant Thornton’s tax guide:
Feel free to comment or ask any questions, and please like and share!
We are US Expats that have extensive experience living and working in Taiwan. In our day, we had to learn many things about Taiwan the hard way. But we have come to learn that Taiwan is one of the best places in the world for Foreigners to live. Our blog does not represent the opinions of every foreigner in Taiwan. We are just trying to help others learn more about this beautiful country.