Tax season is here. In Taiwan, taxes must be filed from before May 31st, however due to the COVID-19 pandemic, the tax filing deadline for 2019 has been extended one month to June 30th, 2020. 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:
Forward: The following is Q+A for tax year 2019 only, based on information provided on Taiwan's Ministry of Finance website.
Q: When should I file Taxes?
A: Between May 1st to May 31st after the tax year (tax year is same as calendar year), however due to the COVID-19 pandemic, the tax filing deadline for 2019 has been extended one month to June 30th, 2020.
If you are leaving the country and do not plan to return to Taiwan, you must file an early tax return within 10 days before you leave. We recommend going to the tax office in person for an early filing.
Q: When are Taiwan tax payments due?
A: Tax payments are due by June 3rd, after which there will be penalties for late payments, however due to the COVID-19 pandemic, the tax payment deadline for 2019 has been extended one month.
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 are a Taiwan national and 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, in general 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 on your Taiwan based salary even if your income came from overseas.
If you stayed in Taiwan between 90-183 days in a calendar year 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 Taiwanese house registration, 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.
Q: How do I count the days I stayed in Taiwan?
A: Please note that the day you come to Taiwan doesn't count, but the day you leave does. It's a good idea to keep track of the number of days you have been in Taiwan via the stamps on your passport.
Q: What is the income tax rate?/ How much is Taiwan tax?
A: The income tax rate for non-residents who earn at least 1.5 the minimum wage per month (34,650 NT as of 2019) is 18% (you can get a tax refund if you pay 18% taxes and then become a tax resident). This tax rate is usually applicable for most white collar foreigners.
For non-residents who earn less than 1.5 the minimum wage per month (34,650 NT as of 2019), the income tax rate is 6%. This tax rate is usually applicable for most blue collar foreign workers. 18% usually is applicable to white collar foreign workers.
The 2019 tax rate for residents (staying over 183 days in Taiwan) is as follows (source: Taiwan Ministry of Finance):
If you make more than 2 million Taiwanese dollars per year, it might be best to keep the number of days in Taiwan down to 183 or below if you can to get the flat rate of 18%.
Q: Are there tax exemptions?
A: Yes, there is an 88,000 NT exemption for each of the taxpayer's dependents, the taxpayer, and the taxpayer's spouse. If a dependent is over 70, then the exemption for them is 132,000 NT.
Q: Does Taiwan tax Mainland China source income?
A: Yes, if you are a Taiwan tax resident. The 6.7 million AMT deduction does not apply to Mainland China income, but if you are a Taiwanese national you can offset your mainland China tax paid via the 兩岸條例.
This is because Taiwan (Republic of China) claims the territory of Mainland China and also claims taxes on income received in China. The territory of Taiwan (Republic of China) does not include Honk Kong or Macau.
Q: What are the standard deductions?
A: The standard deduction for single taxpayers is 120,000 NT. The standard deduction for married taxpayers is 240,000 NT. If you choose an itemized deduction, you cannot use a standard deduction.
Q: What other special deductions are there?
A: Special deductions are as follows:
Q: What are the itemized deductions in Taiwan?
A: If you choose to use itemized deductions, then you cannot use the standard deduction above. For a list of itemized deductions, see below:
Q: What non-taxable fringe benefits can employers give to employees?
A: There are a number of tax deductible fringe benefits available to foreign professionals. For more information on how to implement these tax benefits, please contact a Taiwan tax professional.
Q: What tax benefits are given to foreign special professionals, or those that hold an employment gold card?
A: Please see our full Employment Gold Card FAQ here.
For foreign special professionals who obtain an employment gold and are tax residents for the tax year, they can enjoy a tax benefit of only being taxed half of their income above 3 million NT. Also they will not be subject to AMT (see below).
Q: What is the amount for tax filing exemption? If my salary is low enough do I not have to file taxed in Taiwan?
A: For tax year 2019, if total annual salary was 175,000 NT times the number of dependents and the taxpayer, then you are exempted from filing taxes for 2019.
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.
Alternatively, if you file taxes online, the computer will compute your taxes for you.
Let's say the gross salary for me and my spouse is 2,500,000 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 for me and my spouse (200,000x2=400,000), and also subtract the standard married deduction (240,000) ending up at 1,596,000 NT. This amount falls under the 20% tax bracket (see table above), which is 319,200. Then I subtract the progressive difference for that tax bracket, which is 134,600, ending up at a total of 184,600 NT tax due.
Gross Salary 2,500,000 NT
= 1,596,000 x 20% = 319,200
= 184,600 NT total 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: When will I get my Taiwan tax refund?
A: No one can say for sure. This depends on how early you submitted your tax refund, how complicated your refund is, and the arbitrary decision making of the tax officer assigned to you.
As an example, I personally filed my taxes the first week of May and received my tax refund in July.
If you really want to know the timing of your tax refund, call the tax office: +886-2-2311-3711. Press 7 for English service.
Now, stop asking this question in the comments!
Q: What is the withholding tax rate in Taiwan?
A: This depends on the nature of the payment and whether or not you stay over 183 days in Taiwan, as there are many different withholding tax rates for different types of payments. For salaries of white collar non-tax residents, the withholding tax is 18%. For blue collar non-tax residents, the withholding tax is usually 6%. For tax residents, the withholding tax rate is usually 5% or lower.
The threshold for mandatory monthly withholding tax is roughly a monthly income of around 80,000 NT.
Q: What is the withholding tax rate on dividends for foreigners in Taiwan?
A: The withholding rate on dividends sent to overseas investors is 21% for 2018 onward.
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: Starting from 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.
Please note that overseas salary earned for work done in Taiwan is not applicable for AMT. Also if you are a tax resident, the tax office will try to tax you on your worldwide salary. It is up to you to provide proof that certain salary was not earned from performing work in Taiwan or for a Taiwan client.
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 if I have a question while filing my income tax return on my own?
A: For specific questions, please call the Taiwan tax office: +886-2-2311-3711. Press 7 for English service.
Also, be sure to check out our other FAQ guides about living and working in Taiwan here.
Feel free to comment or ask any reasonable general questions below that a free online blog can answer (otherwise, please just call the tax office), 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.