Whether you are a Taiwan resident or a foreign employee, you may still be liable for taxes if you are employed by a foreign company. Find out the circumstances in which tax liabilities may apply to you.
Tax liability for employees of a foreign company
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According to Taiwan income tax law, employees will be liable to Taiwan tax on all income earned during the employment period in Taiwan, irrespective of whether the income is not paid in Taiwan and that the employer is a foreign company.
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Taxable salary income includes salary, bonus, allowances, transport allowance, meal allowance, and other benefits-in-kind. Note that taxable income also includes any allowances received from the local sponsoring company.
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The general taxation rules for non-tax residents and tax residents are below:
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A foreigner, whose salary is paid by a foreign company, has resided in Taiwan for 90 days or less in a calendar year is not required to file and pay personal income tax.
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When a foreigner, whose salary is paid by a foreign company, has resided in Taiwan for more than 90 days but less than 183 days in a calendar year, is subject to tax at a flat rate of 18% on Taiwan taxable salary income, regardless of where the remuneration is paid. The filing period is from May 1st to May 31st next year. If the taxpayer leaves Taiwan before the filing period begins, he or she must file and pay before departure.
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When a foreigner, whose salary is paid by a foreign company, has resided in Taiwan for 183 days or longer in a calendar year, is subject to the following progressive tax rates for 2025 income (filed in May 2026):
If you are single and have only salary income, the first NT$446,000 of salary for 2025 is tax-free (NT$97,000 personal exemption + NT$131,000 standard deduction + NT$218,000 salary special deduction); for 2026 income it is NT$464,000. For the detailed deduction and exemption, please refer to Taiwan Income Tax Guide.
Tax Payable = Net Taxable Income × Tax Rate − Progressive Difference
To proof the salary income paid by a foreign company, the foreign employer should provide one of the below documents:
(A) A foreign local tax return issued by the foreign local tax authorities such as a P60 (UK) or Form W-2 (US) issued by the employer.
(B) Salary income certificate issued by a foreign local CPA with a copy of the CPA’s professional license.
Q: I live in Taiwan and work remotely for a foreign employer with no Taiwan entity. How do I pay tax? Ans: If you are a Taiwan tax resident (for example, you stay in Taiwan for 183 days or more in the year), salary for work performed in Taiwan is Taiwan-source salary income even though it is paid from abroad. No tax is withheld because the employer has no Taiwan presence, so you must report it as salary income in your May income tax return and pay the tax yourself. Keep your employment contract and payslips, or the documents listed above, as proof.
Income basic tax (IBT)
In addition to regular income tax calculations under the Income Tax Act, Taiwan also imposes IBT(like AMT in US), at a flat rate of 20%, on individuals who are tax residents in Taiwan (including expatriates who stay in Taiwan for 183 days or more in a tax year). Foreign-sourced income is also included in the calculation of IBT if the foreigner has resided in Taiwan for 183 days or more in a calendar year.
- Foreign-sourced income includes:
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Income derived from transactions of securities.
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Non-cash donations or contributions:
The amount of non-cash donations or contributions deducted from the gross consolidated income of the individual income tax return.
3.Total Amount of Dividends and Earnings:
- IBT = (Income subject to IBT - TWD 7,500,000) x 20%; the TWD 7,500,000 deduction is per household and applies from tax year 2024 (unchanged for 2025 and 2026). You pay the difference only if this amount is higher than your regular income tax.