Two factors determines whether foreigners submit tax filing in Taiwan

Tax season in Taiwan runs from May to June. Foreigners have invested or worked in Taiwan in increasing numbers during the past few years. Do foreigners in Taiwan have to report their income for tax purposes? The "number of days of residence" and "determination of domestic income" are the two crucial factors that determine whether foreigners pay taxes, according to the Ministry of Finance.

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The "number of days of residence" and "determination of domestic income" are the two crucial factors that determine whether foreigners pay taxes, according to the Ministry of Finance.Photo reproduced from Freepik

Anyone who has stayed in Taiwan for more than 183 days is considered to be a Taiwan tax resident under the existing tax code. Determinations of settlement must be made between May 1 and May 31 of the following year. The entry and exit dates on the passport or the "Certificate of Entry and Exit Date" issued by the National Immigration Agency of the Ministry of the Interior are used to calculate the duration of stay in Taiwan. If you enter and leave the nation more than once during a single tax year, the tax will be computed cumulatively.

The "Determination of Domestic Income" will be used to determine whether a foreigner must submit a tax return if their stay in Taiwan is fewer than 183 days. According to the tax code, everyone is required to pay taxes as long as the labor service is rendered in Taiwan and the compensation received is considered to be income that is sourced in Taiwan.

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However, if international employees of multinational corporations are stationed in Taiwan, their pay could be paid by the overseas head office. The tax code also contains particular rules in this area. A foreigner must file a tax return in Taiwan for the work compensation they earned from abroad if they have been in Taiwan for 90 days but less than 183 days. However, the labor compensation provided by the foreign employer will not be taxed by the Taiwanese government if a foreign national remains in Taiwan for fewer than 90 days.