Individual income tax (IIT) is imposed on Taiwan-sourced income of both residents and non-residents, unless excluded under the Income Tax Act and other legislation.
A non-resident foreigner who spends fewer than 90 days in Taiwan in a calendar year is liable to an 18% withholding tax (WHT) on wage compensation received from a Taiwan-registered business. Tax is not levied on remuneration received from a company incorporated outside of Taiwan.
A non-resident foreigner who stays in Taiwan for more than 90 days but less than 183 days in a calendar year is liable to a flat 18% tax on Taiwan taxable wage income, regardless of where the compensation is received.
For the 2019 IIT return filing, a resident alien is liable to the progressive tax rates shown below:
For a taxable income between 0 and TWD 540,000, the tax rate is 0.
For a taxable income between TWD 540,001 and TWD 1,210,000, the tax rate is 12 percent.
For a taxable income between TWD 1,210,001 and TWD 2,420,000, the tax rate is 20 percent.
For a taxable income between TWD 2,420,001 AND TWD 4,530,000, the tax rate is 30 percent.
For a taxable income of over TWD 4,530,001, the tax rate is 40 percent.
In addition to normal income tax computations under the Income Tax Act, Taiwan levies IBT on persons who are tax residents in Taiwan at a fixed rate of 20%. (including expatriates who stay in Taiwan for 183 days or more in a tax year). If the following conditions are fulfilled, foreign-sourced income is included in the computation of IBT:
(1) The individual is a tax resident of Taiwan.
(2) Foreign-sourced income is equal to or more than TWD 1 million with basic income exceeding TWD 6.7 million.