What taxes do expats pay in Taiwan?

Before you accept a job offer in Taiwan, you need to understand the local tax system. The numbers might surprise you.

Tax System Overview

Income Tax in Taiwan

Taiwan operates a progressive income tax system, meaning higher earners pay a higher percentage on their income above certain thresholds. The top marginal rate is 40%.

What Does This Mean in Practice?

On a gross annual salary of €90,000, you would pay an effective tax rate of approximately 13.1%, resulting in a net monthly income of approximately €5,792. This accounts for income tax and mandatory social contributions.

For context, the average monthly salary in Taiwan is approximately €1,859.

VAT (Value Added Tax)

The standard VAT rate in Taiwan is 5.0%. VAT is included in consumer prices and applies to most goods and services. Reduced rates typically apply to:

• Basic food items and groceries
• Medical supplies and pharmaceuticals
• Books and educational materials
• Public transport (in some cases)

Special Tax Regimes for Expats

No special tax regime for expats

While Taiwan may not have a widely publicised expat tax regime, there may be bilateral tax treaties with your home country that prevent double taxation. Check if a Double Taxation Agreement (DTA) exists.

Tax Filing Requirements

As a tax resident of Taiwan, you are generally required to:

1. Register with tax authorities upon establishing residence
2. Obtain a tax identification number
3. File an annual tax return (deadlines vary)
4. Declare worldwide income if you are a tax resident
5. Report foreign bank accounts if applicable

Double Taxation

Taiwan has double taxation agreements (DTAs) with numerous countries. These treaties determine which country has the right to tax specific types of income and help prevent you from being taxed twice on the same income. Before moving, check whether a DTA exists between Taiwan and your home country.

Tax Tips for Expats

• Hire a local tax adviser familiar with expat situations during your first year
• Keep records of all income, deductions, and tax payments from day one
• Understand residency rules: most countries consider you a tax resident after 183 days
• Check for exit tax: some countries impose tax on unrealised gains when you leave
• Social security contributions are often separate from income tax and can add 10-20% to your total burden

Additional Practical Information

The following information is compiled from expat community sources and recent reports to complement the official data above.

Key Institutions and Services

Based on current expat reports, the following organisations and services are relevant for newcomers to Taiwan:

• The National Taxation Bureau
• National Taxation Bureau
• National Tax Bureau
• Internal Revenue Service
• National Immigration Agency

Additional Data Points

Recent reports and expat sources provide these additional figures for Taiwan:

• For the first 183 days in Taiwan, expats are taxed at 18-20% of their gross salary. This includes money that goes to your national health insurance. Depending on one's income, the applicable tax rate after the calculation of relevant deductions will be anywhere from five percent at the Low end to 40 percent at the maximum.
• 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 in Taiwan, particularly those who start their jobs mid-year. If you were to begin work in Taiwan 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.
• 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.
• When filing a tax return in Taiwan , there is a NT$92,000 exemption for each person listed in the filing of the return, including the taxpayer, the taxpayer's spouse, and the taxpayer's dependents. If the taxpayer, their spouse, and any dependents have reached 70 years of age, that exemption rises to NT$138,000.

Additional data sourced from expat community reports. All information should be verified with official sources.