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 email@example.com | W www.grantthornton.tw
Other useful articles on this subject:
Grant Thornton’s tax guide:
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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.