Taiwan Company Representatives Tax Regulations
No matter foreigners or Taiwanese to be the responsible person of Taiwan company, the tax regulations will be varied as different as the country of tax residents.
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Residency and holding the household registration in Taiwan within 1 to 31 days (with Taiwan labour insurance, health insurance, national pension, or spouse and children in Taiwan). Such as overseas Chinese (if the period of residency is less than 31 days, it is defined as non-tax residents.)
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Residency and holding the household registration in Taiwan more than 31 days (with Taiwan labour insurance, health insurance, national pension, or spouse and children in Taiwan). Such as Taiwan citizens, Taiwanese on foreign business trips.
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Without household registration in Taiwan but staying in Taiwan more than 183 days. Such as foreign workers in Taiwan (with tax liability shall proceed the annual income tax return in May each year.)
Here is the comparison for Taiwan tax residents versus non-tax residents:
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Item
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Tax Residents
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Non-tax Residents
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Taxation
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Taxes Collection by Taiwan Company for Foreigners
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If
the employment contract stipulates that the foreigner provides part of the
labour remuneration, and has withheld taxes based on the salary income and
filled in various income withholding and withholding exemption vouchers, the
tax paid by the profit-making enterprise can be used as salary expenses
Otherwise, it will be regarded as a gift from the company to the foreigner,
and will be included in the tenth category of other income of the foreigner
and subject to income tax. (Note 1)
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The staying period is more than 183 days usually,
so it is not applicable
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Salary Income
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Rate: 5%, 12%, 20%, 30%, 40%
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Rate: 18% (Note 2)
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Distributed Earnings from Taiwan Company
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1. Deductable Tax Amount: dividends*8.5%, maximum amount TWD 80,000.
2. Separation Tax in 28% ratio
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Rate: 21%
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Oversea Income
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Oversea income more than TWD 1,000,000/each
account is possible to be applied to Alternative Minimum Tax (AMT).
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Not appliable to AMT
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Stocks transaction income from individuals
holding Taiwan listed company’s stocks with printed stocks
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Securities transaction income tax suspended
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Securities transaction income tax suspended
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Stocks transaction income from individuals
holding Taiwan listed company’s stocks without printed stocks
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Transaction income combined into property
transaction income to proceed tax return
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Property
transaction income rate 20%
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Transaction income from individuals executing
Taiwan properties (lands + houses)
* House sales occurred after
01/07/2017 are counted as the properties gained from 01/01/2016
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Rate:
Holding period within 2 years: 45%
Holding period within 2-5 years: 35%
Holding period more than 5 years: 20%
Holding period more than 10 years: 15%
(Separation Tax applied)
Self-owning houses with household registration
more than 6 years:
10%
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Rate:
Holding period within 2 years: 45%
Holding period more than 2 years: 35%
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Rentals, Insurance fees, Medications on birth,
Salary special deductibles, saving investments…etc.
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Privilege for tax exemption, listing and special
deductibles.
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No Privilege for tax exemption, listing and special deductibles.
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Note 1: Tax incentives applicable to foreign professionals employed by profit-making enterprises:
Foreign professionals who are eligible for this preferential tax measure refer to those who work in Taiwan and do not hold dual nationality, and are engaged in maintenance engineering or construction technology, transportation, taxation and financial services, real estate brokerage, immigration services, lawyers, patents Teachers, technicians, medical care, environmental protection, culture, sports and leisure services, academic research, veterinary medicine, manufacturing, distribution services, supervisors of overseas Chinese or foreigners with approved investment or establishment of enterprises, professional, scientific or technical services It is limited to business management, design, planning or consulting, chefs in the catering industry, and other workers designated by the labour department.
Taiwanese companies that employ foreign professionals who meet the above applicable scope should apply for permission from the labour department in accordance with regulations and obtain a foreigner work permit letter. Their total stay in Taiwan in the same tax year must be 183 days, and the total number of days must be the taxable salary paid by Taiwanese employers must reach TWD1,200,000; if the foreign professional has lived in Taiwan for less than one year in the current year, the annual taxable salary converted from the salary during that period must reach TWD1,200,000.
Note 2: Basic salary in 2023 TWD 26,400 * 1.5 times = 18% withheld for monthly salary above TWD 39,600; 6% withheld for monthly salary below TWD 39,600
KNOWLEDGE
