Taiwan
Taipei
EY
Taipei World Trade Center
International Trade Building 9th Floor
333, Keelung Road, Sec. 1
Taipei Taiwan 110
Executive contact
Heidi Liu
Immigration contact
Heidi Liu
Private Client Services contact
Michael Lin
A. Income tax
ey.com/globaltaxguides
+8
+886 (2) 2757-8888, Ext. 88858
Fax: +886 (2) 2729-4176
Email: heidi.liu@tw.ey.com
+886 (2) 2757-8888, Ext. 88858
Fax: +886 (2) 2729-4176
Email: heidi.liu@tw.ey.com
+886 (2) 2728-8876
Fax: +886 (2) 2729-4176
Email: michael.lin@tw.ey.com
Who is liable. Resident and nonresident individuals are subject to consolidated (personal) income tax on income earned from Taiwan sources. Taiwan-source income includes all employment income derived from services performed in Taiwan, regardless of where the compensation is paid.
Individuals are considered residents of Taiwan if they are domiciled and reside in Taiwan or, if not domiciled, have resided in Taiwan for at least 183 days in a tax year. If an expatriate enters and departs Taiwan several times within a calendar year, the resident days are accumulated.
Income subject to tax. Individuals in Taiwan are subject to Taiwan consolidated income tax. However, the amount of income subject to tax and the applicable rates depend on the length of stay as well as on the individual’s residence status.
An individual’s consolidated gross income is the total of the following categories of Taiwan-source income:
• Business profits, including dividends, profits distributed by cooperatives and partnerships, profits from a sole proprietorship and profits from sporadic business transactions
• Income from a professional practice
• Salaries, wages, allowances, stipends, annuities, cash awards, bonuses, pensions, subsidies and premiums paid by an employer for group life insurance policies that offer payment on maturity, but not including the voluntary pension contribution and the voluntary annuity insurance premiums based on the Labor Pension Act, which are up to 6% of the individual’s monthly wage or salary
and the Real Estate Securitization Act is subject to a 10% withholding tax for residents and 15% for nonresidents.
• Interest income from public debts, corporate bonds or financial bonds is subject to a 10% withholding tax for residents and 15% for nonresidents.
The rate of withholding tax on other interest for nonresidents is 20%. For dividends, the rate of withholding tax is 0% for residents and 21% for nonresidents.
Rental income and royalties are included in taxable income. For rental income and royalties, the rate of withholding tax is 10% for residents and 20% for nonresidents.
Other income. The taxable amount of a lump-sum severance payment received in 2024 is calculated in accordance with the following rules:
• If the total amount received in one lump sum is less than TWD198,000 multiplied by the number of service years at the time of separation, the entire amount is tax-exempt.
• If the total amount received in one lump sum is more than TWD198,000 multiplied by the number of service years at the time of separation, half of the excess over TWD198,000 but less than TWD398,000 multiplied by the number of service years at the time of separation is taxable income.
• The excess over TWD398,000 multiplied by the number of service years at the time of separation is taxable income.
• If the individual spent only certain years rendering service in Taiwan among the total service years with an employer, the severance payment may be allocated based on the ratio of the number of years in Taiwan to the total service years in order to arrive at the amount subject to tax in Taiwan.
For severance payments received in installments, the taxable income amount is the total of all payments received in 2024 in excess of the TWD859,000 annual deduction.
The exemption amount for the severance payment may be adjusted if the accumulated consumer price index has increased by at least 3% over the last adjustment.
Income tax paid by an employer on behalf of its expatriates should be treated as the expatriates’ salary income if the employment contract or other related document states that such tax payments constitute part of the expatriate’s compensation package. If the income tax paid by an employer does not constitute part of the expatriate’s compensation package, it is considered a gift to the expatriate and is treated as the expatriate’s other income.
Foreign Professionals. The decree “Preferential Tax Treatment for Foreign Professionals” provides for the preferential taxability of certain assignment benefits paid in accordance with an assignment agreement for a foreign national who qualifies as a “Foreign Professional.”
To qualify as a “Foreign Professional” and accordingly enjoy certain preferential tax treatment for assignment-related benefits, an individual must satisfy the following conditions:
• He or she must be physically present in Taiwan for 183 days or more during a calendar year.
• He or she must not hold dual nationality of Taiwan and another jurisdiction.
• His or her annual taxable salary income must exceed TWD1,200,000.
• The individual must have obtained a working permit from the authority in Taiwan in accordance with Article 46 of the Employment Service Act or obtained an Employment Gold Card in accordance with Article 9 of the Act for Recruitment and Employment of Foreign Professionals.
Foreign special professionals. Effective from 8 February 2018, the Act for Recruitment and Employment of Foreign Professionals (the Act) provides a tax incentive for individuals who have obtained the foreign special professional work permit or Employment Gold Card and meet all of the following requirements:
• He or she is approved to reside in Taiwan as a result of employment for the first time (see Section H).
• He or she is engaged in professional work related to the recognized special expertise in Taiwan.
• During the five years prior to his or her employment engaged in professional work, he or she did not have household registration in Taiwan and was not an individual residing in Taiwan in accordance with the Income Tax Act.
If a foreign special professional meets both of the following conditions, 50% of the annual salary income (after deducting the special deduction for salary or wages; see Exemptions and deductions) in excess of TWD3 million is exempted from Taiwan income tax and non-Taiwan-sourced income is excluded from the calculation of the individual Alternative Minimum Tax (AMT; see Alternative Minimum Tax):
• The individual physically resides in Taiwan for at least 183 days during the tax year.
• The individual receives Taiwan taxable salary income (after deducting the special deduction for salary or wages) in excess of TWD3 million during the tax year.
Under the 2021 amendment of the Act, starting from the first tax year that the foreign special professional meets both conditions, the above tax incentive can be applied for five consecutive years. However, if the foreign special professional does not meet both conditions in any one of the tax years during the five-year span, the tax incentive for that particular year is forfeited and cannot be deferred.
Taxation of share-based compensation. Based on tax decrees issued by the Ministry of Finance, on the exercise of a stock option, the difference between the fair market value of the shares at exercise and the exercise price (that is, the option spread) is taxed as other income.
Taiwan employers have a reporting requirement, but not a withholding requirement, with respect to the option spread. Taiwan employers must issue non-withholding statements to employees who exercise stock options.
For foreign employees who are sent to Taiwan for assignment, the option spread can be prorated based on the ratio of the number of
property held for more than two years and 45% for property held for not more than two years.
Gain from sales of other properties. Capital gains from sales of other properties are taxed together with other income at the rates described in Rates.
Losses. Losses from disposals of properties are deductible only to the extent of gains from the disposals of properties in the same tax year. Net losses may be carried forward for three years.
Exemptions and deductions. A nonresident taxpayer is not entitled to personal exemptions or deductions. Income tax is computed on gross income. The exemptions and deductions described below apply to residents only.
A resident may deduct the personal exemption, and either the standard deduction or itemized deductions, whichever is higher, as well as special deductions, from consolidated gross income to arrive at taxable income.
Personal exemptions. For 2024, a taxpayer is entitled to personal exemptions of TWD97,000 each for the taxpayer, his or her spouse, and each dependent. If the taxpayer, or if married, either the taxpayer or taxpayer’s spouse, is more than 70 years of age, the exemption amount is increased to TWD145,500 per person. The exemption amount is also increased to TWD145,500 for a lineal ascendant dependent who is older than 70 years of age.
The personal exemption amount may be adjusted if the accumulated consumer price index has risen at least 3% over the last adjustment.
Itemized deductions. The following itemized deductions are available:
• The following contributions and donations:
— Up to 20% of gross consolidated income for a taxpayer, his or her spouse, and qualified dependents if given to officially registered educational, cultural, public welfare or charitable organizations
— Up to 100% of gross consolidated income for a taxpayer, his or her spouse, and qualified dependents if given for defense or troop support or if contributed directly to government agencies
— Up to 20% of gross consolidated income for a taxpayer, his or her spouse, and qualified dependents, if given to political parties, political associations and persons planning to participate in a campaign and subject to limitation provided by the Political Donations Act
• Insurance premiums, up to TWD24,000 per person per year (except for the National Health Insurance, which is 100% deductible), for life insurance, medical insurance, labor insurance, national pension, and government employee insurance for a taxpayer, his or her spouse, and lineal dependents.
• Unreimbursed medical and maternity expenses incurred by a taxpayer, his or her spouse, and dependents living with the taxpayer, provided the expenses are incurred in the following recognized institutions:
— Government hospitals.
— Hospitals that have entered into contracts with the government under the national health insurance program.
— Hospitals maintaining complete and accurate accounting records recognized by the Ministry of Finance. Expenses incurred outside of Taiwan may be allowed as deductions only if such expenses are incurred in a foreign public hospital, university hospital, or private foundation hospital. Claims for deductions of expenses incurred in foreign hospitals must be supported by evidence of the officially registered status of the hospitals.
• Uncompensated casualty losses (uninsured portion of losses caused by a natural disaster of force majeure). To claim this deduction, the loss must be appraised by an investigator appointed by the tax authorities within 30 days after the disaster occurred.
• Mortgage interest paid on loans from financial institutions for the purchase of an owner-occupied dwelling (limited to one), up to TWD300,000, after subtracting the special deduction for savings and investments claimed for the same tax year. The dwelling must be a principal residence located in Taiwan.
Standard deduction. For 2024, a taxpayer may claim a standard deduction instead of the itemized deductions listed above. The standard deduction is TWD131,000 for a single taxpayer and TWD262,000 for a married taxpayer filing jointly.
The standard deduction amount may be adjusted if the accumulated consumer price index has increased by at least 3% over the last adjustment.
Special deductions. The following special deductions are available:
• Special deduction for salary or wages: The lesser of either total salaries and wages earned or TWD218,000 is deductible by each salary and wage earner included in the same return. Each salary and wage earner may choose to deduct the following expenses from salary income if the sum of the deductible expenses exceeds the TWD218,000 special deduction for salary or wages:
— Expenses incurred for purchasing, leasing, cleaning or maintenance of clothes or costumes that are specifically for professional use
— Expenses incurred for attending courses or training that are specifically work-related
— Expenses incurred for purchasing books, journals or tools that are specifically work-related
The deductible amount for each type of the above expenses is limited to 3% of the individual’s annual salary and wage income.
• Special deduction for savings and investments: Up to TWD270,000 for each family unit is deductible for income realized from a savings trust fund and for interest income realized on deposits with financial institutions, excluding interest income from postal savings accounts (which is not taxable), from short-term commercial paper (which is subject to a final 10% withholding tax) and from beneficiary securities or asset-based securities issued according to the Financial Asset Securitization Act and the Real Estate Securitization Act (which is subject to a final 10% withholding tax).
household unit to arrive at the minimum taxable income (MTI) subject to AMT.
Under the AMT scheme, individual taxpayers calculate both the tax due under the general income tax rules and the AMT rules, and pay the higher of the two amounts. If foreign-source income has been included in the calculation of the AMT, any foreign tax paid on these amounts may be offset against AMT.
Relief for losses. Except for losses derived from the disposal of properties described in Capital gains and losses, no loss may be carried forward or back.
B. Other taxes
Estate tax. Estate tax is imposed on the estate of a decedent who was a citizen of Taiwan or who owned property (including movable property, immovable property, and all other rights and interests of monetary value) in Taiwan. If the decedent was a Taiwan citizen regularly domiciled in Taiwan, tax is levied on all property, wherever located. If the decedent was a Taiwan citizen regularly domiciled outside Taiwan or a foreign citizen, tax is levied only on property located in Taiwan.
The basis for estate tax is the prevailing value of property at the time of death, less legal exclusions, exemptions and other deductions. Land and buildings are valued at an officially assessed value determined by the relevant government agencies.
In general, an exemption of TWD13,330,000 is allowed for each decedent. The following are other allowable deductions from total taxable property (the first five items are not applicable for foreign nationals and Taiwanese regularly domiciled outside Taiwan):
• TWD5,530,000 for the decedent’s surviving spouse
• TWD1,380,000 for each of the decedent’s surviving parents, TWD560,000 for each dependent grandparent, dependent brothers and sisters, and lineal descendants, as well as an additional TWD560,000 for each year that each lineal descendant and dependent brother and sister is younger than 18 years of age
• An additional TWD6,930,000 for each qualified handicapped or mentally disturbed heir
• The value of agricultural land and the products on the land if the heirs continue to farm the land for at least five years after the death of the decedent
• 80%, 60%, 40% or 20% of the value of any estate property that was inherited by the decedent within six, seven, eight or nine years before his or her death, respectively
• Taxes and penalties owed, and debts incurred, by the decedent before his or her death
• TWD1,380,000 for funeral expenses
• Direct and necessary expenses to execute the decedent’s will and administer the estate
Certain property is not subject to estate tax. The following exclusions are among the more common:
• Proceeds from life insurance policies with designated beneficiaries
• Furniture, household equipment and other daily necessities, up to TWD1 million
• Patents and literary or artistic works created by the decedent
• Donations to government agencies and enterprises and to privately incorporated educational, cultural, social welfare, charitable and religious organizations
• Tools used in the decedent’s profession, up to TWD560,000
• Property inherited by the decedent within five years before death that was subject to tax
• Land reserved for public facilities
First 50,000,000 10 5,000,000 5,000,000
Next 50,000,000 15 7,500,000 12,500,000
Above 100,000,000 20 —
The following items may be adjusted if the accumulated consumer price index has increased by at least 10% over the last adjustment:
• Exemptions
• Estate tax rate brackets
• Exclusion amount of furniture, household equipment and other daily necessities, and tools used in the decedent’s profession
• Deductions for the surviving spouse, lineal descendants, parents, siblings, and grandparents of the decedent, standard deduction for funeral expenses, and special deductions for handicapped heirs
The executor of an estate, or the heir in the absence of an executor, must file an estate tax return with the local tax bureau generally within six months after the death of the deceased. An extension of three months for the filing may be applied for up front. Payment of tax is due within two months after receipt of a tax assessment notice, and a two-month extension can be applied for if necessary. If the tax due exceeds TWD300,000, a taxpayer may, subject to prior approval, pay it in 18 installments at intervals of no longer than two months or pay the tax in kind. A taxpayer who is not satisfied with an assessment may seek relief through administrative and judicial reviews.
Gift tax. Gift tax is imposed on gifts made by a donor who is a citizen of Taiwan or who owns property (including movable property, immovable property, and all other rights and interests of monetary value) in Taiwan. If the donor is a Taiwan citizen regularly domiciled in Taiwan, the tax is levied on any donated property, wherever located. If the donor is a Taiwan citizen regularly domiciled outside Taiwan or a foreign citizen, tax is levied only on donated property located in Taiwan.
Gifts are valued based on the prevailing value at the time of donation. Land and buildings are valued at officially assessed values determined by government agencies.
An annual exemption of TWD2,440,000 per donor is allowed for taxable gifts. The following items are excluded from total taxable gifts:
• Donations to government agencies and enterprises and to educational, cultural, religious, public welfare and charitable organizations
E. Tax treaties
Taiwan has entered into comprehensive tax treaties with the following jurisdictions.
Australia
Indonesia
Poland
Austria Israel Saudi Arabia
Belgium Italy Senegal
Canada Japan Singapore
Czech Republic Kiribati
Denmark Korea (South)
Slovak Republic
South Africa
Eswatini Luxembourg Sweden
France Malaysia Switzerland
Gambia Netherlands Thailand
Germany New Zealand
United Kingdom
Hungary North Macedonia Vietnam
India
F. Entry visas
Paraguay
Foreign passport holders must have valid visas when they enter Taiwan. However, to meet special needs, the Ministry of Foreign Affairs may grant exemptions from visa requirements to foreign nationals of certain jurisdictions (visa-exempt entry) or allow certain foreign nationals to apply for an eVisa, travel authorization certificate and/or landing visa if certain conditions are met. In addition, other than diplomatic and courtesy visas, two categories of visas, which are the visitor visa and the resident visa, are available for foreign nationals to enter the territory of Taiwan.
Visitor visas are issued to those who wish to visit Taiwan for short time periods (for example, for working less than six months, sightseeing, conducting business and other purposes).
Foreign nationals accepting employment in Taiwan must obtain the appropriate visas to enter Taiwan and the necessary employment authorization (work permits) to work in Taiwan because having the right to enter Taiwan does not automatically grant the right to work in Taiwan. In addition, individuals looking for jobs in Taiwan may apply for an employment-seeking visa.
The Workforce Development Agency issues employment authorizations. The Ministry of Foreign Affairs in Taiwan and consulates abroad issue the appropriate visas based on employment authorizations. The National Immigration Agency supervises entry, departure and residence of foreign nationals working in Taiwan.
G. Resident visas
In general, resident visas are issued to foreign nationals who obtain employment authorizations issued by the Workforce Development Agency that are valid for longer than six months.
Foreign nationals entering Taiwan with resident visas must report to the National Immigration Agency to secure their residency and apply for Alien Resident Certificates (ARCs) within 30 days counting from the next day after their arrival. The ARC bears the foreign national’s personal information, reason for residence, residential address in Taiwan and the expiration date of the ARC.
foreigners, the company must be the Taiwanese branch of the contracted foreign entity or the contracted local entity in Taiwan. If neither is applicable, the contracted foreign entity may authorize a representative agency to file the work permit application on behalf of the company.
Foreign nationals may not be self-employed in Taiwan.
Work permit for foreign special professionals. Effective from 8 February 2018, the Act for Recruitment and Employment of Foreign Professionals introduced a work permit for foreign special professionals with a maximum validity period of five years. To qualify for the foreign special professionals work permit, foreign employees must satisfy the qualification for a Type A or Type B work permit, have earned an average monthly salary of at least TWD160,000 and have experience working in the designated field of industry. Depending on the field of industry, qualifications other than the income threshold may be considered.
Employment Gold Card. Foreign professionals who satisfy the requirements to obtain a work permit for foreign special professionals may also meet the qualification to apply for an Employment Gold Card. This is a four-in-one personal employment pass combining work permit, resident visa, ARC and reentry permit. The application may be filed by a foreign special professional who is not already employed by a local employer.
I. China Mainland nationals
China Mainland nationals must apply for a Taiwan entry permit in advance to enter Taiwan. The purpose of the entry and the planned activities must be approved by the competent authority. The two main categories of entry permits are Business and Professional. In most cases, the applicants fall into the Business category. Under the Business category, the following are the four commonly used entry purposes:
• Business meetings
• Training (to be trained)
• Intracompany transfer
• Contract fulfillment
J. Family and personal considerations
Family members. Resident visas are granted to the dependents of either a Taiwan citizen or an expatriate who obtains an ARC (see Section G). Copies of the marriage certificate and birth certificates, which are legalized by the Taiwan consulate located in the issuing jurisdiction must be provided to obtain resident visas for the spouse and children, respectively. Health certificates or immunization records may be required for dependents’ resident visa applications, depending on the local Taiwan consulate’s policy. The spouse and children may apply for their resident visas and ARCs together with the expatriate.
For dependents over six years old, the ARC application must be accompanied by a health certificate issued within the preceding three months. For dependents six years old or younger, the immunization record must be provided with the ARC application. However, if both the dependents and expatriate are eligible for