A1. |
(1) Any individual earning income from sources in Taiwan (including income derived outside Taiwan for services rendered in Taiwan when staying in Taiwan for over 90 days within a single taxable year) is required to pay income tax in accordance with Article 2 of the Income Tax Act. The income tax liability of an individual depends on his or her residence status (i.e., resident or nonresident) without consideration of the individual’s nationality.
i. Residents
A resident is taxed progressively on the basis of net consolidated income (gross consolidated income including income derived outside Taiwan for services rendered in Taiwan, minus exemptions and deductions) at rates from five percent to 45 percent. Residents shall file an annual income tax return in the month of May following the year in which the income was earned. Residents leaving Taiwan before the end of a year in which income was earned from sources in Taiwan shall file an income tax return for that year prior to departure.
ii. Nonresidents
A nonresident who earns income that is subject to withholding tax in accordance to Article 88 of the Income Tax Act is not required to file an income tax return. However, such an individual shall be subject to the withholding tax, and the tax shall be withheld upon payment of the income at a rate prescribed by relevant regulations. Currently, the withholding tax rate on wages or salaries is 18 percent, unless the wages or salaries are below 1.5 times the monthly basic salary as prescribed by the Executive Yuan (i.e., NT$31,514 in 2017), in which case the rate is six percent. For other categories of income, the withholding rate is 20 percent in most cases. However, a nonresident who earns income that is not subject to withholding tax―e.g., earnings from property transactions―shall file an income tax return at a rate prescribed by relevant regulations. Furthermore, with regard to nonresidents who stay in Taiwan for more than 90 days within one taxable year and derive income from sources outside Taiwan for services rendered in Taiwan, such income shall be declared and taxed at a rate of 18 percent.
(2) A foreign national who resides in Taiwan for less than 183 days in a taxable year shall be considered a nonresident. As mentioned above, his or her employer in Taiwan shall withhold tax upon payment of wages and salaries at a rate of six or 18 percent.
(3) For more information on tax issues pertaining to foreign nationals working in Taiwan, please visit the eTax Portal of the Ministry of Finance at https://www.etax.nat.gov.tw/etwmain/, or call (02) 2311-3711 ext. 1116 or 1118. |