The taxation system in Taiwan

The taxation system in Taiwan
shutterstock.com
Updated 2018-03-05 14:08

Taxes are a headache no matter where you live. They're especially difficult for American expats who still have to file US taxes every year. Payroll taxes for expats in Taiwan are complicated. However, when it's time to file annual tax returns, the government makes the process as easy as possible.

Basics of Payroll Taxes

For the first 183 days in Taiwan, expats are taxed at 18-20% of the gross salary. This includes money that goes to your national health insurance.

After 183 days in Taiwan (excluding any trips outside the country), the payroll tax can be dropped to 3% of the gross salary for the remainder of the year.

On January 1, the payroll tax will return to 18-20% until you have been physically in Taiwan for 183 days.

This process causes some consternation among expats, particularly those who start their jobs mid-year. If you were to begin work in June or July, you would be taxed at 18-20% through the end of the year. You would also be taxed at that rate for the first 183 days of the following year.

Filing Taxes

Taxes must be filed for anyone who has been in Taiwan for 183 days or more during the previous year. The tax-filing time is May 1-31 (or June 1 if the 31st is a Sunday or national holiday) each year. The tax offices are open on Saturdays, but they are more crowded then. They are also busier during the final week of May. It is recommended to file taxes during the week, if possible.

To file taxes in May, you file online if it is not your first time doing so. Otherwise, you can visit your nearest district tax office. The National Taxation Bureau will have a separate line for foreign residents to file taxes as well as staff ready to assist in the process.

Documents needed to file taxes:

  • ARC or passport

  • Tax form provided by your employer

  • Bank card or statement with account number

In some cases, the tax form from an employer may not be accurate. However, the National Taxation Bureau will have a record of your salary to ensure accuracy. This may, however, cause problems if you are also filling taxes in your home country.

If you are owed a refund, it will be deposited in your bank account in August. If you plan to leave Taiwan before receiving a refund, you can assign a trusted recipient to receive and forward the refund.

The program to e-file taxes can be found on the government website.

When e-filing, you can use your Taiwan bank account to pay any tax due online. Or, you can print out the tax information and pay at any bank you choose.

For additional information about taxes in Taiwan, check the FAQ on the National Taxation Bureau website.

We do our best to provide accurate and up to date information. However, if you have noticed any inaccuracies in this article, please let us know in the comments section below.