Home >> Tax in Taiwan >> FAQs for gold card tax benefits
Tax exemption for Gold Card holders / Foreign Special Professionals
Starting 2018, Taiwan issues Gold Card, a multiple functions Resident certificate to talented foreign nationals. If gold card holders meet certain criteria, they are granted tax exemption. Below are FAQs released by the National Taxation Bureau, Ministry of Finance.
Q1: What is the legal basis of enacting tax incentives for foreign special professionals? When were they put into practice? And what do they include?
A1: 1. The tax incentives regulated in the “Act for the Recruitment and Employment of Foreign Professionals” (hereinafter referred to as “the Act”) came into force on February 8, 2018. A qualified foreign special professional can apply for this tax relief from 2018. In order to strengthen the incentives for recruiting foreign special professionals, full text of the Act was amended and promulgated on July 7, 2021, and the Act was executed on October 25, 2021 by the Executive Yuan. Among the amendments include the extension of the applicable period of tax incentives from 3 years to 5 years as specified in Article 20 (formerly Article 9).
2. From 2018, if a foreigner engages in professional work and meets certain requirements, then within 5 years starting from the tax year in which the foreign special professional for the first time meets the conditions of residing in the R.O.C. for 183 days or more, and having a salary income of more than NT$3,000,000, only the NT$3,000,000 salary income and half of the amount above the NT$3,000,000 in each such tax year shall be included in the gross income for the assessment of individual income tax liability. If the foreigner obtains overseas income set forth in the provisions of Subparagraph 1, Paragraph 1, Article 12 of the Income Basic Tax Act in such tax year, such income shall be excluded from the basic income.
3. A foreign special professional who applied for the tax incentives of the Act before July 7, 2021 may apply for the tax benefits for a period of 5 years. For example, if he/she applied for the tax incentives from 2018 to 2020 and meets the regulations in the years of 2021 and 2022, he/she can also apply for the tax incentives.
【Applicable Subjects and Requirements】
Q2: What is the definition of “foreign special professionals?”
A2: The term "foreign special professional" shall refer to a foreign professional who engages in professional work in the R.O.C. and has special expertise needed by the R.O.C. in science & technology, economy, education, culture & the arts, sports, finance, law, architectural design, national defense, or other fields as announced by the central competent authority, or who has been recognized by the National Development Council in consultation with the central competent authority as possessing special expertise.
Q3: Referring to Q2, what is the definition of “professional work?”
A3: “Professional work” means the following work:
1. Work as specified in Subparagraphs 1 to 3, 5, and 6, Paragraph 1, Article 46 of the Employment Service Act.
2. Work as specified in Subparagraphs 1 and 3, Paragraph 1, Article 48 of the Employment Service Act.
3. A full-time foreign language teacher in a short-term tutorial school registered in accordance with the Supplementary Education Act (hereafter referred to as “a short-term tutorial school”), or possessing specialized knowledge or skills, and approved as a short-term tutorial school teacher by the central competent authority of the industry concerned in consultation with the Ministry of Education.
4. A teacher of a subject other than a foreign language in a special class approved by the Ministry of Education for the children of foreign professionals, foreign special professionals, and foreign senior professionals.
5. Work in teaching academic subjects or foreign language courses, teacher training, curriculum development, and activity promotion, as specified in the Enforcement Act for School-based Experimental Education, the Act Governing the Commissioning of the Operation of Public Schools at Senior High School Level or Below to the Private Sector for Experimental Education, and the Enforcement Act for Non-school-based Experimental Education at Senior High School Level or Below.
Q4: Who is eligible to apply for the tax incentives for foreign special professionals?
A4: A foreign special professional, who has been recognized to have the special expertise announced by the central competent authority, has obtained the foreign special professional employment (work) permit document issued by the Ministry of Labor or by the Ministry of Education (if he/she has met the requirements of Article 7 of the Act and is exempted from applying for a work permit, the work permit can be replaced by the certificate of special expertise issued by the central competent authority), or has obtained the Employment Gold Card issued by the National Immigration Agency, Ministry of the Interior, and has met all of the following requirements is eligible to apply for the tax incentives:
1. He/she has been approved for the first time to reside in the R.O.C. for the purpose of work.
2. He/she has engaged in professional work related to the recognized special expertise in the R.O.C.
3. During the last 5 years prior to the day of his/her employment engaged in the professional work or the day of obtaining his/her Employment Gold Card, he/she did not have household registration in the R.O.C. and was not an resident individual of the R.O.C. in accordance with the Income Tax Act.
Q5: Referring to Q4, if a foreigner has been previously approved to reside in the R.O.C. before his/her employment engaged in the professional work, does he/she still meet the requirement of “the first time been approved to reside in the R.O.C. for the purpose of work”?
A5: If a foreigner has been previously approved to reside in the R.O.C. before his/her employment engaged in professional work in the R.O.C., but such approval is not given because of his/her engagement in professional work (such as residence for study or as dependents), the foreigner is exempt from the first-time approval limitation.
Q6: Referring to Q4, what are the specific dates of “the day of employment engaged in the professional work” and “the day of obtaining the Employment Gold Card,” respectively?
A6: “The day of his/her employment engaged in the professional work” is the first day of the employment period of the foreign special professional employment (work) permit document issued by the Ministry of Labor or by the Ministry of Education, while “the day of obtaining his/her Employment Gold Card” is the “date of issue” shown on the Employment Gold Card.
Q7: Referring to Q4, how do we define “an individual who does not have household registration in the R.O.C. and is not a resident of the R.O.C. in accordance with the Income Tax Act”?
A7: This refers to an individual who has no household registration in the R.O.C. and stays less than 183 days within each year (1/1~12/31).
Q8: What are the regulations for a foreign special professional who need not apply for a permit according to Article 7 of the Act?
A8: A foreign special professional who meets one of the following conditions
need not apply for a permit to engage in professional work in the R.O.C.:
1. Employed as a consultant or researcher at any level of government or its subordinate academic research institute.
2. Employed by a public or registered private college/university for lecturing or academic research as approved by the Ministry of Education.
3. A foreign special professional obtained permanent residency.
【Explanation of the Computation of Income Tax Relief】
Q9: Example: David, a foreign special professional meeting the requirements mentioned in Q4, has a salary of NT$8,200,000 related to his special professional work and overseas income of NT$2,000,000 in the applicable year. How does he calculate his income tax relief?
A9: 1. The amount of income from salaries shall include all salaries after deducting the special deduction of income from salaries or necessary expenses. Assuming a special deduction of income from salaries NT$200,000 in this case, then a salary income of NT$8,000,000 (= NT$8,200,000 – NT$200,000).
2. Amount of non-taxable salary income = (NT$8,000,000 – NT$3,000,000) *50% =NT$2,500,000
Amount of taxable salary income =
3. Overseas income NT$2,000,000 is excluded from basic income.
Q10: What is the applicable scope of “salary income” mentioned in the Act？
A10: 1. The term "salary income" in the Act shall refer to the amount of aggregate salaries which may be calculated in the gross amount of income paid by domestic and offshore employers for the foreign special professional's engagement of professional work. However, other salary unrelated to the foreign special professional’s special expertise shall not be applicable to the tax incentives.
2. The above-mentioned salary income shall be applied to the tax incentives in the taxable year. For instance, according to Article 19-1 of the Statute for Industrial Innovation, where an individual who acquires stocks as an employee’s bonus, he/she may opt to include the salary income in the gross income and declare their income tax in the year of transfer or book-entry transfer. Therefore, if a foreign special professional receive the salary income of stocks acquired as stock-based employee compensation according to Article 19-1 of the Statute for Industrial Innovation and opts to declare their income tax in the year of transfer, such income shall be calculated in salary income and applied to the tax incentives in the year of transfer.
【Explanation of the Applicable Period of the Tax Incentives】
Q11: How do we define the specific point of time for counting the “first 5 years” when a foreign special professional's salary income exceeds NT$3,000,000 and is eligible for the tax incentives?
A11: The term "first 5 years" in the tax incentives shall start from the year when the foreign special professional has resided in the R.O.C. for 183 days or more for the first time, and has an annual salary income over NT$3,000,000. The taxpayer can not choose the starting year and applicable years as he/she wishes.
Q12: Example of engaging in professional work in the R.O.C. for the first time in 2021:
David, obtaining the foreign special professional employment permit in 2021 and meeting the requirements mentioned in Q4, stays in the R.O.C. for 183 days or more and has an annual salary income over NT$3,000,000 derived from his special professional work during the years 2021 ~ 2025. What is the applicable period of his tax incentives?
A12: Year 2021 is the first applicable year and David can apply for the tax incentives from 2021 to 2025.
Q22: What will happen if a foreign special professional has applied for the tax incentives pursuant to the regulations, but is found to be not in compliance with the regulations by the tax authority afterwards?
A22: If a foreign special professional has applied for the reduction or exemption of the consolidated income tax and income basic tax pursuant to the regulations, but was found not to be in compliance with the conditions stipulated in relevant regulations by the tax authority afterwards, his/her case shall be subject to supplementary tax payable in accordance with the relevant regulations. If he/she submits false statements or provides improper information, tax evasion will be subject to penalty.
More questions? Let us guide you further
You may find these useful guides in helping you make your decision: