Taiwan Tax Guide for Digital Nomads

Taiwan Tax Guide for Digital Nomads: Stay Smart, Stay Compliant​

Welcome to Taiwan! As one of Asia's most dynamic hubs for digital nomads, Taiwan offers a blend of vibrant city life, rich culture, breathtaking landscapes, and a strong tech ecosystem. Whether you're here to code from a cozy café in Taipei, manage global projects from a sunny beach in Taitung, or network with fellow entrepreneurs, there's something for everyone.

But let's not forget one essential part of your adventure: staying on top of your tax obligations. Whether you're a freelancer, remote worker, or entrepreneur, understanding how Taiwan's tax rules apply to you can save you from unexpected complications. Here's a straightforward guide tailored for digital nomads who might stay in Taiwan for more than 90 days but less than 183 days.

Why Taxes Matter for Digital Nomads in Taiwan

While you're busy chasing dreams and deadlines, taxes might feel like a far-off concern. However, if your stay extends beyond a certain duration, Taiwan's tax regulations might come into play—especially if you're earning income from overseas while working remotely.

By understanding your tax obligations, you can:

1. Avoid penalties or fines for non-compliance.
   
2. Make use of tax treaty benefits to prevent double taxation.
   
3. Focus on what truly matters: enjoying your stay and growing your career.

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Are You a Tax Resident in Taiwan?

Generally, Taiwan determines tax residency based on how long you stay within a calendar year:

• More than 183 days: You're a tax resident. This means your global income is taxable in Taiwan.
  
• 91–183 days: You're a non-tax resident, but you may need to declare some income depending on its source.
  
• 90 days or fewer: Good news! You generally don't have to pay income taxre payments from foreign employer in Taiwan unless you earn other income locally.

For digital nomads staying between 91 and 183 days, the key question is whether your income qualifies as Taiwan-sourced.

What Counts as Taiwan-Sourced Income?

If you're working in Taiwan and earning income, here's how the rules break down:

1. Taiwan-Sourced Income: Any income from services performed while physically in Taiwan—whether paid by local or foreign client—is generally subject to Taiwanese taxes.
   
2. Foreign-Sourced Income:

• • Income from overseas employer might be exempt if it meets specific criteria and your stay doesn't exceed 90 days; or
    
  • Tax treaty provisions could apply, allowing for exemption or tax relief.

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How Tax Treaties Can Save You Money

Taiwan has tax treaties with 35 countries, including major hubs like the UK, Germany, Japan, and Singapore. These treaties are designed to prevent double taxation, meaning you won't pay tax twice on the same income.

Key conditions for exemption under a tax treaty(would vary depending on which tax treaty applies):

• Your stay in Taiwan is less than 183 days in any 12-month period (this might span two calendar years).
  
• Your income is paid by a foreign employer.
  
• The payment is not borne by any of foreign employer's Permanent Establishment (PE) in Taiwan.

Practical Example: Imagine you're a developer working remotely for a UK company. You stay in Taiwan for 120 days:

• If your income is paid by the UK company and isn't linked to a Taiwanese entity, it may not be taxable in Taiwan under the UK Taiwan tax treaty.
  
• Submit proof, like your residency certificate and employment contract, to claim the exemption.

Steps to Stay Tax-Compliant

1. Track Your Days:

• • Keep a clear record of your entry and exit dates. This determines your tax status.

2. Check Your Tax Treaty Eligibility:

• • Research whether your home country has a treaty with Taiwan and understand its terms.

3. Declare and Apply for Exemptions:

• • Even if you qualify for a tax exemption, you may need to file a tax declaration and attach supporting documents.

4. Seek Professional Advice:

• • Taxes can be tricky! Consult a local tax advisor(such as LY!) to ensure compliance and maximize your benefits.

Bust the Myths About Taxes in Taiwan

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1. "I'm just visiting, so I don't need to worry about taxes."

• • Even if you're a tourist, working remotely in Taiwan for over 90 days could trigger tax obligations.

2. "My income comes from overseas, so it's not taxable."

• • If you're working while physically in Taiwan, the source of your income might not matter—it could still be taxed.

3. "I didn't register, so no one will notice."

• • With increasing digitalization, tax authorities are becoming more vigilant. Compliance is better than risking fines or penalties. More ever, immigration authorities could restrict the individual from leaving Taiwan until the tax and penalties are settled.

Need Help?

Navigating taxes might not be the most exciting part of your digital nomad journey, but it doesn't have to be stressful. Taiwan's tax system is straightforward once you understand its nuances, and you don't have to figure it out alone.

Get expert advice from Taiwan's tax professionals to ensure your adventure remains hassle-free. Your only job? Enjoy everything this amazing country has to offer.