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, if they 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. Foreign nationals 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
- Interest income
- Rental income and royalties
- Self-employment income from farming, fishing, animal husbandry, forestry and mining
- Gains from sales of rights and properties other than land
- Cash or payments in kind received as winnings in competitions or lotteries
- Retirement pay, severance pay, non-insurance old-age pension payments and insurance payments made under annuity insurance based on the Labor Pension Act received by the individual
- Other income
Taxable income of residents is computed by deducting from consolidated income certain allowable exemptions and deductions (see Exemptions and deductions). The income of a taxpayer’s dependents is also included in the taxpayer’s taxable income.
Under a tax decree issued in 2010, foreign professionals may qualify for preferential tax treatment. For details, see Foreign Professionals.
Employment income. In general, a nonresident staying in Taiwan for no longer than 90 days during a calendar year is not subject to Taiwan income tax on salary received from an offshore employer, provided the payment is not charged back to any Taiwan entity; otherwise, the income is subject to an 18% withholding tax on salary received from a resident employer.
Nonresidents are subject to Taiwan income tax on Taiwan-source employment income, regardless of where the income is paid, at a fixed rate of 18% on salary income.
For individuals who stay in Taiwan less than 300 days in a calendar year, salary not borne by a Taiwan entity may be allocated based on the number of days present in Taiwan to determine the amount taxable in Taiwan.
The following benefits are exempt from consolidated income tax for all expatriates:
- Traveling expenses paid for expatriates on home leaves
- Rental payments for a house leased by the employer for expatriates
- Durable furniture purchased by a Taiwan-registered entity
Individuals who qualify as “Foreign Professionals” (see Foreign Professionals) are also exempt from consolidated income tax on the following assignment-related benefits:
- Moving expenses paid for expatriates and their families when they report for duty and at the time of repatriation
- Water, electricity, gas, telephone and cleaning services for expatriates’ houses leased by Taiwan entities
- Automobiles leased by employers for expatriates
Investment income. Dividend and interest income are subject to consolidated income tax and are taxed together with other income at the rates set forth in Rates. However, interest income from postal savings accounts is excluded from gross income. In addition, the following types of interest income are subject to withholding tax and are not included in gross income:
- Interest income from short-term commercial paper is subject to a 10% withholding tax for residents and 15% for nonresidents.
- Interest income from beneficiary securities or asset-based securities issued according to the Financial Asset Securitization Act 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 20% for nonresidents.
Rental income and royalties are included in taxable income. For rental income, the rate of withholding tax is 10% for residents and 20% for nonresidents. For 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 2016 is calculated in accordance with the following rules:
- If the total amount received in one lump sum is less than TWD175,000 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 TWD175,000 multiplied by the number of service years at the time of separation, half of the excess over TWD175,000 but less than TWD351,000 multiplied by the number of service years at the time of separation is taxable income.
- The excess over TWD351,000 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 2016 in excess of the TWD758,000 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.
Effective from 1 January 2009, if a Taiwan entity pays income tax on behalf of its expatriates, such payment is considered a gift to the expatriates from the company and is taxed as other income for the expatriates. A supplementary tax ruling was published in 2010. This ruling provides that, effective from 12 March 2010, 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. On 8 January 2008, the Taiwan Ministry of Finance released a tax decree “Preferential Tax Treatment for Foreign Professionals,” which is effective from 1 January 2008. However, it applies to foreign professionals who began to work in Taiwan before the issuance of the tax decree. The decree 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 country.
- 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.
Taxation of share-based compensation. On 30 April 2004, the Ministry of Finance released a tax decree that addresses the taxation of stock options issued by Taiwan companies. Under the decree, 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.
In addition to the 30 April 2004 income tax decree, the Ministry of Finance issued a separate tax decree on 17 May 2005 to address the taxation of stock options issued by non-Taiwanese companies. Similarly, the option spread is taxed as other income at the time of exercise. The reporting requirement is similar to the requirement applicable to Taiwan companies.
The 17 May 2005 decree also addresses the taxation of stock options exercised by cross-border employees. Under the decree, the option spread can be prorated based on the ratio of the number of days the employee is physically present in Taiwan during the period from the date of grant through the date of vesting to the total days in such period. However, based on the tax authority’s current practice, for Taiwan employees on assignment to foreign countries, if the individuals remain as employees of the Taiwan entity (that is, the Taiwan entity continues the enrollment of National Health Insurance and Labor Insurance for the relevant employees), the proration of stock option income may not be allowed.
During 2007, the Ministry of Finance issued decrees indicating that the income (discount) derived from employee stock purchase plans and income derived from stock appreciation rights should also be treated as other income.
In a tax decree issued on 11 July 2012, the Ministry of Finance treated restricted stock issued by Taiwanese companies as other income.
For other types of equity income, no specific Taiwan income tax laws or regulations addressing Taiwan taxation currently exist.
Capital gains and losses
Gains from securities transactions. Effective from 1 January 2016, income tax on capital gains derived from securities transactions is suspended and losses on such transactions are not deductible.
A securities transaction tax is imposed on proceeds from sales of shares at a rate of 0.3%.
Income tax on income derived from transactions in futures is suspended, and losses on such transactions are not deductible.
Gain from sales of real properties. Effective from 1 January 2016, capital gains from sales of real properties are subject to different tax schemes, depending on the property acquisition date and the length of the holding period.
For real properties acquired before 2014 or acquired on or after 2 January 2014 and held for more than two years, gains from the sale of houses and apartments are taxed together with other income at the rates described in Rates.
For real properties acquired on or after 2 January 2014 but held for two years or less or real properties acquired on or after 1 January 2016, the new capital gain tax scheme applies. For resident taxpayers, the final tax rate on the capital gains ranges from 15% to 45%, depending on the length of holding period. For a resident taxpayer who sold his or her home used for the purpose of self-dwelling for more than six years, the capital gains up to TWD4 million are exempt from tax, and the portion exceeding TWD4 million is subject to a 10% tax rate. For nonresident taxpayers, the tax rate is 35% for property held for more than one year and 45% for property held for not more than one year.
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 2016, a taxpayer is entitled to personal exemptions of TWD85,000 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 exemp tion amount is increased to TWD127,500 per person. The exemption amount is also increased to TWD127,500 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 national 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, not exceeding TWD200,000, if given to a political party.
- Up to TWD200,000 if given to qualified political candidates, not exceeding TWD100,000 per candidate.
- Insurance premiums, up to TWD24,000 per person per year (except for the National Health Insurance, which is 100% de ductible), 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 de duction, the loss must be appraised by an investigator appointed by the tax authorities within 30 days after the disaster occurred.
- Rental expenses paid by the taxpayer, taxpayer’s spouse and/or lineal dependents for housing located in Taiwan, up to TWD120,000 per household. To qualify for the deduction, the property must be used for residential purposes and not for business purposes. However, the deduction will be disallowed for taxpayers who claim interest payments on loans to purchase owner-occupied dwellings. Taxpayers must provide supporting documents.
- 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 2016, a taxpayer may claim a standard deduction instead of the itemized deductions listed above. The standard deduction is TWD90,000 for a single taxpayer and TWD180,000 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 TWD128,000 is deductible by each salary and wage earner included in the same return.
- 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, on treasury bonds, on cor porate bonds and on financial bonds, 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).
- Special deduction for individuals with disabilities: Up to TWD128,000 is deductible for an individual meeting the definition of a person with disabilities or diagnosed as having mental illness under the Mental Health Law.
- Special deduction for losses from property transactions: Losses derived from disposals of property are deductible to the extent of gains derived from disposals of property in the same tax year. Any remaining losses may be carried forward for three years.
- Special deduction for tuition fees paid for post-secondary education: Up to TWD25,000 of tuition fees paid for each dependent child less any reimbursement received for post-secondary education is deductible.
- Special deduction for preschool children: TWD25,000 for each dependent child who is five years of age or younger. The deduction is not allowed if the taxpayer meets either of the following two conditions:
- The taxpayer’s annual net taxable income after subtracting the deduction is subject to a progressive tax rate of 20% or higher tax rates.
- The taxpayer’s minimum income under the Alternative Minimum Tax Law exceeds the TWD6,700,000 deduction (see Alternative minimum tax).
The amounts of the special deductions for salary or wages and for persons with disabilities may be adjusted if the accumulated consumer price index has increased by at least 3% over the last adjustment.
Rates. The progressive consolidated income tax rates for residents for 2016 are set forth in the following table.
|Taxable income||Tax rate||Tax due||Cumulative tax due|
The income tax rate brackets may be adjusted if the accumulated consumer price index has risen at least 3% over the previous rate adjustment.
The flat tax rate for nonresident individuals varies according to the type of income. The following are the flat tax rates:
- Salary income and severance and retirement payments: 18%
- Interest income other than those specifically identified in the tax regulation (see Investment income): 20%
- Dividends, commissions, rentals, royalties, gains from winnings in competitions or lotteries and income from independent professional practice: 20%
Alternative Minimum Tax. The Alternative Minimum Tax (AMT) Law applies to both profit-seeking enterprises and individuals.
Under the AMT Law, for residents, the following items are added back to net income as calculated under the general income tax system to determine minimum income (MI) subject to AMT:
- Foreign-source income, if such income for each filing household unit exceeds TWD1 million in a tax year
- Insurance payments from life insurance policies or annuities contracted on or after 1 January 2006 in which the beneficiary and the purchaser are not the same person (TWD33,300,000 exemp tion may be claimed)
- Capital gains derived from transactions in beneficiary certificates of privately placed securities investment trust funds
- Deductions claimed for non-cash charitable contributions
- Other items published by the Ministry of Finance
The AMT rate for individuals is 20%. A TWD6,700,000 deduction may be claimed from the minimum income (MI) by each filing 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.
Estate tax. Estate tax is imposed on the estate of a decedent who was a national of Taiwan or who owned property in Taiwan. If the decedent was a Taiwan national regularly domiciled in Taiwan, tax is levied on all property, wherever located. If the decedent was a foreign national or Taiwan national regularly domiciled outside Taiwan, 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 TWD12 million is allowed for each decedent. The following are other allowable deductions from total taxable property:
- TWD4,930,000 for the decedent’s surviving spouse
- TWD1,230,000 for each of the decedent’s surviving parents, TWD500,000 for each dependent grandparent, dependent brothers and sisters, and lineal descendants, as well as an additional TWD500,000 for each year that each lineal descendant and dependent brother and sister is younger than 20 years of age
- An additional TWD6,180,000 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
- A percentage of the value of any estate property that was inherited by the decedent within nine years before his or her death and that was subject to tax
- Taxes and penalties owed, and debts incurred, by the decedent before his or her death
- TWD1,230,000 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 TWD890,000
- 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 TWD500,000
- Property inherited by the decedent within five years before death that was subject to tax
The net estate, after exclusions, deductions and exemptions for 2016, is taxed at a rate of 10%.
The following items may be adjusted if the accumulated consumer price index has increased by at least 10% over the last adjustment:
- 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, and the tax bureau must complete the tax assessment within the following two months. Payment of tax is due within two months after receipt of a tax assessment notice. 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. Tax is imposed on gifts made by a donor who is a national of Taiwan or who owns property in Taiwan. If the donor is a Taiwan national regularly domiciled in Taiwan, the tax is levied on any donated property, wherever located. If the donor is a Taiwan national regularly domiciled outside Taiwan or a foreigner, 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 TWD2,200,000 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
- Transfers between spouses
- Marriage gifts of up to TWD1 million given by each parent
- Agricultural land given to the donor’s heir, if the heir continuously uses the land for farming for at least five years after the transfer
The net gift, after exclusions and exemptions for 2016, is taxed at a rate of 10%.
The annual exemption amount and gift tax rate brackets may be adjusted if the accumulated consumer price index has increased by at least 10% over the last adjustment.
A donor must file a gift tax return with the local tax bureau within 30 days after making a gift if the aggregate amount of total gifts during the calendar year, including the current gift, exceed the TWD2,200,000 annual exemption. The local tax bureau must complete the tax assessment within two months after it receives the return. Payment is due within two months after the receipt of a tax assessment notice. If the tax due exceeds TWD300,000, a taxpayer may, subject to prior approval, pay the tax in 18 installments at intervals of no more 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.
No social security taxes are levied in Taiwan. However, nominal labor insurance premiums and national health insurance premiums are imposed at the following rates on each person employed by a Taiwan business entity.
|Labor insurance scheme, on monthly salary of up to TWD45,800; paid by:|
|National health insurance scheme, on monthly salary of up to TWD182,000; paid by:|
In addition to the above regular premiums, a supplementary premium for national health insurance is payable by the employer and employee if the conditions described below are met.
Effective from 1 January 2016, the supplementary premium is levied at a rate of 1.91%. An employer must pay the supplementary premium for the excess portion if the total monthly salary expenses exceed the monthly insurance salary for all employees.
An employee must pay the supplementary premium for the excess portion if his or her total bonus or incentive payments in a calendar year exceed four times his or her monthly insurance salary.
Income derived from part-time jobs is subject to the supplementary premium if a single payment exceeds the minimum wage publicized by the central labor competent authority.
The following income not derived from employment is subject to the supplementary premium if a single payment is TWD20,000 or more, with cap of TWD10 million:
- Professional income from the performance of services rendered by the practitioner of a profession
- Dividend income
- Interest income
- Rental income
Tax filing and payment procedures
The tax year in Taiwan is the calendar year. A taxpayer must file an annual income tax return between 1 May and 31 May following the close of the tax year. No extensions are allowed.
Married couples must file joint tax returns except for the first year of marriage and the year of divorce, when they may choose to file as single or as married. However, working spouses may choose to separately compute tax on their salary income. Effective from 1 January 2014, spouses may also choose to separately compute tax on their total taxable income.
The following are the tax filing procedures for aliens, depending on the length of their residence in Taiwan:
- In general, a nonresident staying in Taiwan for 90 days or less is only subject to withholding tax on income received from a Taiwan entity and, accordingly, does not need to file an income tax return. For these individuals, income tax payable is withheld directly by the payer at the time of payment at various tax rates depending on the respective income classification (see Rates). However, capital gains derived from property transactions or securities transactions and other income that is not subject to withholding tax must be declared and any tax due must be paid on the filing of the tax return.
- An individual present in Taiwan for longer than 90 days must file an annual income tax return.
Taxpayers must submit supporting documents issued by their nonresident employers stating the amount of foreign-paid compensation. The documents must be certified by the tax office that has jurisdiction over the employer or by a certified public accountant.
For taxpayers who file returns after 31 May following the end of the tax year, interest is charged on the net amount of tax payable at a specified interest rate set annually by Taiwan tax authorities.
If an item of income is omitted or if the return is improperly filed, the tax authorities may assess a penalty of up to two times the amount of the additional tax due. If the taxpayer fails to file a tax return, the tax authorities may assess a penalty of up to three times the tax payable.
Taiwan has entered into comprehensive tax treaties with the following jurisdictions.
|Hungary||New Zealand||United Kingdom|
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 countries (visa-exempt entry) or allow certain foreign nationals to apply for visas on their arrival in Taiwan (landing visa) if certain conditions are met. Foreign nationals who are eligible for visa-exempt entry or a landing visa must have a passport that is valid for more than six months. 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).
Depending on the applicant’s nationality, the two types of visitor visas are single-entry visas and multiple-entry visas.
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.
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 the entry, departure and residence of foreign nationals working in Taiwan.
In general, resident visas are issued to foreign nationals who obtain employment authorizations valid for longer than six months from the Workforce Development Agency.
Foreign nationals entering Taiwan with resident visas must report to the National Immigration Agency to secure their residence and apply for alien resident certificates (ARCs) within 15 days counting from the date 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. Expatriates holding ARCs should report any changes to the ARCs to the National Immigration Agency within 15 days after the change occurs.
Work permits and self-employment
Foreign nationals who intend to work in Taiwan must apply for employment authorizations (work permits). An expatriate’s entry, residence and departure are governed by the National Immigration Agency.
An application for employment authorization must be filed by the employer in accordance with the Measures for Regulations on the Permission and Administration of the Employment of Foreign Workers (Employment Rules).
The Employment Rules apply to foreign nationals who wish to work in Taiwan. For most professional foreign expatriates, the three types of job categories are described below.
Type A. The Type A category includes specialized or technical workers.
To qualify as a specialized or technical worker, foreign employees must possess one of the following qualifications:
- A Ph.D. or master’s degree in a related field.
- A bachelor’s degree in a related field with more than two years of work experience in a related field.
- Proof of employment in a related field for more than five years, and during this period, the completion of related training and the receipt of awards or recommendations from employers. Foreign employees must satisfy all three of these requirements.
- Employment with a multinational enterprise for more than one year and an assignment to work in Taiwan from the multinational enterprise.
An employer must satisfy one of the following conditions to hire foreign specialized or technical workers in the manufacturing industry or the wholesale business:
- Sales volume of TWD10 million for the preceding year or an average of TWD10 million for the preceding three years
- Total import and export volume of USD1 million for the preceding year or an average of USD1 million for the preceding three years
- Total import and export commission revenue of USD400,000 for the preceding year or an average of USD400,000 for the preceding three years
- Company that has been incorporated for less than one year and has paid-in capital of TWD5 million
- Foreign branch that has been established for less than one year and has registered working capital of TWD5 million
- Foreign representative office that has been approved by the government authorities and has been operating in Taiwan
- Research and development center or business operational headquarters that has been approved by the government authorities
Type B. The Type B category includes branch managers for Taiwan branches of foreign companies, representatives for Taiwan representative offices of foreign companies and general managers of companies approved for foreign investment under either the Statute for Investment by Overseas Chinese or the Statute for Investment by Foreign Nationals.
To qualify as a branch manager, representative or general manager of a foreign-investment approved company, an employee must be registered with the government authorities and shown on the company registration card. An employer must satisfy one of the following conditions to hire these foreign nationals:
- Sales volume of TWD3 million for the preceding year or an average of TWD3 million for the previous three years
- Total import and export volume of USD500,000 for the preceding year or an average of USD500,000 for the preceding three years
- Total import and export commission revenue of USD200,000 for the preceding year or an average of USD200,000 for the preceding three years
- Company has been incorporated for less than one year and has paid-in capital of TWD500,000
- Foreign branch has been established for less than one year and has registered working capital of TWD500,000
- Foreign representative office has been approved by the government authorities and has been operating in Taiwan
For Type A and Type B jobs, employment authorization is based on the employment contract, with a maximum length of three years. Employment extensions can be granted. The wages for foreign employees who undertake these job assignments may not be lower than the amount recorded in the latest survey.
Type G. The Type G category includes contracting foreigners appointed by a foreign legal person to engage in works in order to perform contracts of construction, sale, technical cooperation and other necessities.
To qualify to hire contracting foreigners, the employer must be the Taiwanese branch (representative agency) or contracted foreign entity (agent authorized by a foreign legal person). If a foreign corporation performing a contract needs to assign an expatriate to Taiwan to fulfill contractual obligations, the expatriate can apply for a work permit. Normally, the duration of such work permit may not exceed one year, but it is possible to apply for a renewal. The entry visa held by such foreign employee is deemed to be a work permit for up to 30 days. The work permit for the foreign employee must be applied for within 30 days following the employee’s arrival in Taiwan.
Foreign nationals may not be self-employed in Taiwan.
China 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 three commonly used entry purposes:
- Business meetings
- Training (to be trained)
- Intracompany transfer
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 country, 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 visa-exempt entry into Taiwan, the health certificate and immunization record are not required.
A working spouse does not automatically receive work authorization. If the spouse wishes to file for a work permit, he or she must do so independently.
Dependents of China nationals are subject to the same Taiwan entry permit application requirement (see Section I) if they want to join the expatriate in Taiwan.
Marital property regime. All married individuals in Taiwan are subject to a statutory property regime, unless the parties agree otherwise in writing and register the agreement in court before or during the marriage. The statutory property regime applies to all heterosexual couples married in Taiwan.
Under the statutory property regime, the property of the husband and the wife is divided into property acquired before marriage and the property acquired during marriage.
If it cannot be determined whether property was acquired before marriage or during the marriage, it is presumed that the property was acquired during the marriage. If it cannot be determined whether the property is owned by the husband or the wife, it is presumed that the property is owned by the husband and the wife jointly.
The remains of fruits gained during the marriage from the property acquired by the husband or the wife before marriage is deemed to be property acquired during the marriage.
If the husband and the wife enter into a contract regarding the holding of matrimonial property and subsequently adopt the statutory regime, the property held before the adoption is deemed to be property acquired before marriage.
Under the statutory regime, on the termination of the marriage relationship, the balance of the property acquired by the husband or the wife in marriage, after deduction of debts incurred during the marriage, if any, is equally distributed to the husband and the wife, except for property acquired as a result of a succession or a gift or property acquired as a solatium (compensation for an injury or loss).
Taiwan does not enforce community property claims brought between couples from community property countries who establish marital domicile in Taiwan if the husband’s most recently acquired nationality is Taiwanese. In other cases, community property claims are enforced, unless another property regime is registered in court.
Forced heirship. Taiwan’s succession law provides for forced heirship rules. The law guarantees certain heirs a portion of the decedent’s estate.
The compulsory portion for an heir is determined in accordance with the following rules:
- For a lineal descendant by blood, the compulsory portion is one-half of his or her entitled portion.
- For a parent, the compulsory portion is one-half of his or her entitled portion.
- For a spouse, the compulsory portion is one-half of his or her entitled portion.
- For a brother or a sister, the compulsory portion is one-third of his or her entitled portion.
- For a grandparent, the compulsory portion is one-third of his or her entitled portion.
For purposes of the above rules, the entitled portion is the portion of property that an heir should receive, which is calculated based on the number of heirs in the same priority. For example, if three heirs are in the same priority, each heir can receive 1/3 of the property.
Driver’s permits. Foreign nationals may not drive legally in Taiwan with their home country driver’s licenses. However, expatriates may drive legally with valid international driver’s licenses after applying for international driver’s license permits in Taiwan.
Foreign nationals with valid international driver’s licenses from reciprocating countries may drive legally in Taiwan for 30 days without applying for international driver’s license permits. However, if the stay in Taiwan is more than 30 days, foreign nationals must apply for international driver’s license permits.
Based on driver’s license reciprocity with the expatriate’s home country, an expatriate who possesses an ARC (see Section G) with a validity period of more than one year may apply for a Taiwan license after taking a physical examination if his or her home-country license is valid and has been legalized by the Taiwan Consulate in the issuing country. Before an expatriate without a home-country license can take the written and driving tests to obtain a Taiwan driver’s license, he or she must first undergo a physical examination and then apply for a learner license and maintain it for at least three months.