Update: How Do I Calculate My Taiwan Tax? 2024 Individual Income Tax Table

In general, any Taiwan-derived income, salary or otherwise, needs to be reported in your annual tax return. It’s important to note that as a foreigner, any foreign-sourced income that is earned for services rendered in Taiwan needs to be reported as part of your annual taxable income.

There are 10 general categories of income classified by the Taiwan tax code:

1. Corporate dividends and profit distribution

2. Professional practitioner income

3. Salaries and wages

4. Interest

5. Rentals and royalties

6. Self-employment income from agriculture, fishing, forestry, mining, etc.

7. Gains from property transactions

8. Prizes or winnings from games or lotteries

9. Severance and retirement payments

10. “Other”
    

For the purposes of this article, we’ll focus primarily on taxes related to Salaries and wages. If you have questions or concerns about other types of tax, please don’t hesitate to contact us.

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For non-resident taxpayers (under 90 days)

• Income from a Taiwan company will be subject to 18% withholding tax

• Income from a foreign enterprise will be exempt (as long as the payment is not drawn from a Taiwan company).

For non-resident taxpayers (between 91 and 183 days)

• Income from Taiwan OR foreign enterprises is subject to a flat 18% withholding tax.

For tax residents, Taiwan uses a progressive tax structure. Consult the following table to determine your taxable income (all amounts are in Taiwan Dollars):

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 November 2024. 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.

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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).

Calculating your AMT/IBT rate correctly can be complex. If you find yourself meeting the criteria mentioned above, we recommend consulting a tax professional to ensure that you are in compliance with tax regulations while also taking advantage of all possible exemptions and deductions that you are eligible for! More information on Income Basic Tax

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