Guide to Calculating Taiwan Income Tax (2025 Income, 2026 Filing)

Del Sol CPA
Jan 15
3 min read

This guide explains how Taiwan’s individual income tax rules apply to both residents and non-residents, covering the 2025 tax year, with filing occurring in May 2026.

Taiwan income tax calculation

Non-residents (≤90 days in Taiwan)

Taiwan-sourced income is subject to 18%–21% withholding tax.
No income tax return is required unless you earn Taiwan-sourced income not subject to withholding.
Such income must be declared and taxed at the prescribed withholding rate before departure.

Non-residents (91–183 days in Taiwan)

Taiwan-sourced income is subject to 18%–21% withholding tax.
No income tax return is required unless you earn income not subject to withholding, including foreign income for services performed in Taiwan.
This income must be declared and taxed at the prescribed withholding rate before departure.

Residents (≥183 days in Taiwan)

A progressive tax rate applies to annual income.
Taxable income includes:
- Salary (including overseas income for services rendered in Taiwan)
- Dividends
- Interest
- Professional practice income
- Rental and lease income
- Other taxable categories
Residents must file an annual tax return with the Tax Bureau and pay taxes between May 1 and May 31 of the following year.

2025 Progressive Tax Table (Residents) Taiwan income tax calculation

Tax Rate	Income bracket	Progressive Difference
40%	NTD 4,980,001 or more	NTD 911,700
30%	NTD 2,660,001 to 4,980,000	NTD 413,700
20%	NTD 1,330,001 to 2,660,000	NTD 147,700
12%	NTD 590,001 to 1,330,000	NTD 41,300
5%	NTD 0 to 590,000	NTD 0

Source: Ministry of Finance

Note:

The information in this section is current as of January 2026. Please be aware that the rates and deductions for each bracket can vary from year to year. Always check the official Ministry of Finance website or consult a licensed tax professional for accurate information.

Each “chunk” of your annual income is taxed at a progressively higher rate. A fixed sum is also deducted from each “chunk” of taxable income above the first bracket.

For example:

If you earn NTD 1,200,000 in a year, the first NTD 590,000 will be taxed at 5%. The remaining NTD 610,000 will be taxed at 12%, minus the progressive difference (NTD 41,300).

Your total taxable income will be calculated as follows:

Step 1: First bracket: 590,000 * 5% = 29,500

Step 2: Second bracket: 610,000 * 12% = 73,200 ( - 41,300 progressive difference) = 31,900

Step 3: Gross taxable income: 29,500 + 31,900 = 61,400

Note: Benefits and reimbursements: cash allowances, remuneration for benefits, and other similar payments are considered taxable income.

Alternative Minimum / Income Basic Tax

If you have foreign-sourced income, another component of your tax obligations to be aware of is the Income Basic Tax (IBT). IBT is a flat-rate tax of 20% on foreign-sourced income. This applies if:

You are a tax resident in Taiwan
You have foreign income equal to or more than NTD 1 million
You have a basic income exceeding NTD 7.5 million

In short, if you meet these criteria you must calculate how much you owe under the IBT structure:

IBT owed = (regular income + “add-back income” - NTD 7.5 million) * 20%

“Add-back items” can include income such as insurance benefits, investment returns, and foreign-sourced income. You are obligated to pay whichever amount is greater (IBT or regular tax rate).

Determining whether the AMT/IBT applies, and how it is calculated, can be complex. Individuals who believe they may fall within the criteria described above often choose to consult a qualified tax professional to help confirm compliance with applicable tax regulations and better understand available exemptions or deductions.