Many foreigners are considering coming to Taiwan for digital nomadism. This year, the Taiwanese government has also opened applications for a digital nomad visa, attracting even more interest. One of their key concerns is: Do I need to pay income tax in Taiwan? If so, how is it calculated?

This article will clarify Taiwan’s income tax rules for digital nomads, helping them understand their tax obligations and avoid unnecessary tax risks due to unfamiliarity with local regulations.

Do You Need to Pay Income Tax? It Depends on Your Stay Duration and Tax Status

Taiwan’s tax residency status primarily depends on the number of days a foreigner stays in Taiwan. There are three main categories:

1. Stay Less Than 90 Days (Exempt from Tax Unless Earning Taiwan-Sourced Income)

If a foreigner stays in Taiwan for less than 90 days within a calendar year, they generally do not need to pay income tax unless their income is sourced from Taiwan.

• Taiwan-Sourced Income: If the foreigner provides services to a Taiwan-based company, is employed by a Taiwan company, or earns income directly linked to Taiwan, they are subject to tax. Typically, the Taiwan-based company will withhold the tax at the source, or the individual may need to file before leaving Taiwan.
• Non-Taiwan-Sourced Income: If a digital nomad’s income comes from an overseas employer or clients (e.g., freelancing or receiving salaries from an overseas company) and has no Taiwan-sourced income, they usually do not need to file income tax in Taiwan.

2. Stay Between 90 and 183 Days (Taxable Income Required to Be Declared)

If a foreigner stays in Taiwan for more than 90 days but less than 183 days, their tax obligations change:

• Income from Taiwan Companies: The Taiwan-based company typically withholds tax at the applicable rate, or the individual may need to file a tax return before leaving Taiwan.
• Income from Foreign Employers: If a foreigner provides services to overseas clients while in Taiwan, they may need to proactively declare and pay tax before leaving.

With Taiwan’s digital nomad visa, foreigners can stay for a maximum of six months. If they stay in Taiwan over 183 days using another visa or method, a different tax calculation applies.

3. Stay 183 Days or More (Taxable Under Taiwan’s Progressive Tax Rate System)

If a foreigner stays in Taiwan for 183 days or more, they are considered a tax resident and must declare global income to the Taiwanese government. Their income is subject to progressive tax rates (5% to 40%) as follows:

Income tax filing must be done between May 1 and May 31 of the following year for the previous year’s income. However, if a foreigner leaves Taiwan mid-year, they must file their income tax return at least 10 days before departure.

Foreign nationals can file their income tax with the local National Taxation Bureau or relevant offices in each region. For detailed tax information, please contact the National Taxation Bureau or visit their official website.

References:

• Taiwan Income Tax Act
• Ministry of Finance Tax Portal – Foreign Taxpayer Services
• R.O.C. Source Income and Scope of Exemptions

Further Reading : Taiwan Digital Nomad Visa is Here! Application Requirements and Required Documents All in One View!

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