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Home >> Tax in Taiwan >> Income tax for foreign nationals in Taiwan
2024 income tax filing
2024 income tax filing
Income Tax for foreign nationals in Taiwan
Tax Obligations Affected by Length of Stay
(A) Residing in Taiwan for 90 days or less within a fiscal year( January 1 ~ December 31):
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Salary and compensation from Taiwan-registered companies are subject to an 18% withholding tax.
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Salary and compensation from foreign companies are not taxable.
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Commissions, interest, rental income, and royalties from Taiwan-registered companies are subject to a 20% withholding tax.
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Dividend income from Taiwan-registered companies is subject to a 21% withholding tax.
(B) Staying in Taiwan for over 90 days but less than 183 days within a fiscal year:
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Salary and compensation from Taiwan-registered companies are subject to an 18% withholding tax.
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Salary and compensation from foreign companies are also subject to an 18% withholding tax.
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Commissions, interest, rental income, and royalties from Taiwan-registered companies are subject to a 20% withholding tax.
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Dividend income from Taiwan-registered companies is subject to a 21% withholding tax.
(C) Residing in Taiwan for 183 days or more within a fiscal year:
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Individuals become tax residents.
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Dividends distributed to resident shareholders are not subject to withholding tax. But divided tax is paid when filing tax.
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Tax residents must file an income tax return between May 1 and May 31 of the following year to settle any outstanding tax liabilities.
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Taxpayer can deduct exemptions and deductions from their income.
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If leaving Taiwan during the fiscal year, the individual must file the tax return before departure.
Income tax for Taiwan tax resident
A resident taxpayer is required to submit an income tax return between May 1 and May 31 of the subsequent year and settle any outstanding tax liabilities. The applicable tax rates span from 5% to 40%.
How do foreign nationals residing in Taiwan for 183 days or more in 2024 calculate their tax? What exemptions and deductions are deductible?
A foreign national who resides in Taiwan for at least 183 days within a year is classified as a tax resident of Taiwan. The individual income tax for a foreign resident is computed using a progressive rate based on their net consolidated income. This net consolidated income is determined by subtracting applicable exemptions and deductions from the annual gross consolidated income.
Net taxable income = Total Household income - Exemptions - Deductions
Tax Payable=(Net taxable income × Tax Rate)−Progressive Difference
Step 1: Determine Total Household Income:
Total Household Income: This refers to the total income earned during the previous year (January to December). Taxpayers, including their spouses and dependents, must declare the following types of income:
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Dividend income
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Professional practice income ( Lawyer, Doctors, Accounting firm, etc)
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Salary income
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Interest income
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Rental income
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Royalties
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Capital gains from property transactions
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Prizes or awards from competitions, contests, or lotteries
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Retirement income
Step 2: Determine the Exemptions and Deductions
1. Personal Exemptions (2024):
97,000 exemption for each person (including the taxpayer, their spouse, and dependents under age 70.
145,500 exemption for each person (including the taxpayer, their spouse, and dependents aged 70 or above.
2. Deductions (2024): Foreigners can claim either standard deductions or itemized deductions and special deductions.
(1)Salary deduction: 218,000 for received salary income.
(2) Taxpayers can choose between the "Standard Deduction" and the "Itemized Deduction."
Standard deduction: It does not require any supporting documents. 131,000 for a single person and 262,000
for a married couple.
Itemized deductions: It requires the submission of supporting documents as proof.
A.Donation:
B.Personal insurance premiums:
C.Medical and maternity expenses:
D.Losses from disaster:
E.Mortgage Interest paid on loan for an owner-occupied residence:
(3)Special deductions:
A. Special deduction for salary or wages:
B. Special deductions for savings and investment:
C. Special deduction for disability:
D. Special deduction for tuition:
E. Special Deduction for Pre-School Children: First child: 150,000, Second and subsequent children: 225,000
No deduction shall be made if one of the following circumstances occurs:
1. After deducting this special deduction and the special deduction for long-term care, the applicable comprehensive income tax rate for the whole year is more than 20%, or the applicable tax rate for the individual or spouse’s salary income or various types of income separately calculated is more than 20%.
2. Choose to calculate the tax payable separately on dividends and earnings at a single tax rate of 28%.
3. The basic income calculated in accordance with the Basic Income Tax Regulations exceeds the prescribed deduction amount (6.7 million yuan in 2024).
F. Rental expense: The maximum deduction for the rental expense is NT$180,000.
To claim a deduction for house rent, you must provide the following documents and information:
Lease Agreement: A copy of the lease signed by both the tenant and landlord.
Proof of Rental Payment: This can include receipts issued by the landlord, remittance certificates, ATM transfer records, or other evidence of payment.
Property Tax Number: The house tax identification number of the rental property.
Landlord's Identification Number: The national ID number of your landlord.
Proof of Address Registration: A document, such as your ARC (Alien Resident Certificate), showing your registered address matches the rental property.
Important Note: Ensure that your landlord has reported the rental income to the tax authorities before claiming the deduction. If they fail to do so, they may face penalties.
(4)Deduction for Basic Living Expense Difference :
Basic Living Expense difference=
Basic Living Expense (202,000 for 2024) × Number of dependents plus taxpayer) minus
(Personal Exemption: 92,000) X ( number of dependents + taxpayer) minus
Standard Deduction(NT$131,000 if single, 262,000 if married )
if Basic Living Expense Difference is negative, the deduction is 0
if Basic Living Expense Difference is positive, use the difference as the deduction
Calculation example for basic living difference:
David is a taxpayer with a wife and two children, whom he can claim as dependents. He chooses to use the Standard Deduction. The difference between his basic living expense amount and the total of his exemptions and standard deduction is calculated as follows:
Basic Living Expense Amount = NT$202,222 per person.
Number of Family Members = 4 (David, his wife, and two children)
Exemptions = NT$92,000 per person
Standard Deduction for Married Couple = NT$262,000
Calculation:
Basic Living Expense Amount×4?(Exemptions for 4 people+Standard Deduction)?(Exemptions for 4 people+Standard Deduction)
=202,222×4?(92,000×4+262,000)= 178,888
Step 3: Calculate Tax Payable: Use the formula:
Tax Payable=(Net Consolidated Income × Tax Rate)−Progressive Difference
2024 progressive tax rates (Unit: NTD)
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