Documenting overseas income for Taiwan taxes

Legal Taxes
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I’m looking for recent advice on/experience with documenting income derived from abroad so I can pay Taiwanese income taxes on it.

I’ve seen the following part in the “Documents Required for Filing” table:

Remunerations derived from abroad for services rendered within the R.O.C. need to be combined and filed together with domestic income. If a taxpayer receives remuneration derived from abroad, items from at least one of the following categories need to be submitted:
A. Documents verified by foreign local tax authorities.
B. Documents verified by a foreign local CPA with a copy of the professional license of the practitioner or notary public.

(If a taxpayer fails to submit the relevant documentation as mentioned above, his/her income from the filing year will be assessed according to the Standard Amounts by the Tax Office.)

Neither A nor B seem particularly convenient to get in my case. How strict is the Taipei tax office on this?

My situation is something like this: Originally from the UK but haven’t lived there for over a decade and no tax liability there. No employment income in Taiwan, but open work permit (gold card) with freelance income from UK and Japanese companies, where I issue monthly invoices depending on the work done and they pay me by bank transfer into a UK account. I have PDF invoices for both companies and international transfer receipts for the Japanese company (which are clearly labeled “Salary/Remuneration Payment”), but that’s it. So no documentation from foreign tax authorities. (To my understanding, HMRC doesn’t issue anything like that for non-resident freelancers. No idea about Japan - I don’t have any connection to that country besides the client.)

I’m happy to declare the income and pay tax on it, but rather disinclined to start looking up CPAs/notaries in two countries and having them extort money from me for stamping a few dozen invoices (if that would even be sufficient)…just so I can have the benefit of paying taxes. :face_with_raised_eyebrow:

Finally, that last part in the quote above - does anyone have any idea what “standard amounts” means here, i.e., what happens if I can’t/don’t submit that documentation?

I realize I may ultimately just need to go to the tax office and discuss it with them, which I’ll probably end up doing next week, but would like to have an idea what I’m in for first. (I also played around with the e-filing software yesterday and it does seem to let me input overseas income, but I believe I’m then supposed to mail in the supporting evidence.)

So if I go there with the invoices and transfer receipts, is there a chance that the worker has the discretion to take these as evidence when assessing the tax, or are they just going to charge me some standard amount based on what they think I should have earned? (Side point: If that’s in the NT$50-70k monthly income range or less, the “standard amount” might end up being favorable compared to what I’d be trying to declare, which would be an odd situation.)

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No one? :slightly_frowning_face:

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I have to file taxes this week, I’ll let you know. Maybe I will see you at the tax office.

I was planning to just show them a W2 from my US S-Corp, but if they need it notarized by local tax official in the US etc. I’ll tell them it’s not possible for me to do that right now.

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ding

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I went in person today but I couldn’t go in because my card ends in an even number. I will try again tomorrow.

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Oh that rule is in effect at the tax office too? I didn’t know that! Don’t we need to make an appointment anyway?

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I didn’t have to make an appointment when I went in on April to ask some questions (the office was empty back then)

I guess you can call them and ask. You can also file over the phone, but I figure it’s easier to get things done in person.

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I went to pay my taxes today. It’s my 2nd time filing taxes in Taiwan. This time it took about 15 minutes. They had everything on file and I didn’t have to do much, just gave them my tax forms, they didn’t ask notarization or anything, and they calculated everything, gave me some printouts, and I paid in cash at the local 7-11.

If you get a mean looking person at the counter, just leave (say you forgot something), come back, until you get a friendly looking person. Read the online google map reviews for employee surnames to avoid.

Also if you owe a lot in tax and choose to pay in cash at the local 7-11, you can probably impress some cashiers.

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Thanks for getting back to me. A couple of follow-up questions:

How did they have your foreign income on file? I thought from your previous post that you had a U.S. company?

That’s funny about avoiding particular employees - I didn’t think that’d be a thing haha.

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I gave them printouts of my non-Taiwan tax forms, they had my # of days in Taiwan already, so they just did a calculation based on that (i.e. 40% of time in Taiwan, multiplied by my W2 form, multiplied by tax rate).

Also my situation is a bit simpler perhaps, since I was a non-resident, so non-salary income doesn’t need to be reported, no deductions etc. Just a very simple formula.

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I’m sure they’ve seen it all. Maximum allowed at 711 is $20000 anyways.

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who did you impress and what happened next?

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And how does that make you feel? :joy:

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Just an update, now that I remember. The Taipei tax office did indeed accept a bunch of monthly invoices (and international bank transfer receipts, for the client for which I had them), which weren’t verified by foreign local tax authorities or a foreign local CPA as stated in the rules.

I took them there last week rather than attempting to mail them, which was probably a good idea as it took a while to explain everything. But ultimately the lady there didn’t seem to have a problem with what I submitted and said she’d contact me in August or so, when she has time to check them, if there are any issues.

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Reviving the thread because this year I will also find myself in a similar situation as @Andrew. I am a Gold Card holder and I am working for an overseas company that pays me a salary every month to an overseas account in foreign currency. I am too very reluctant to throw money down the drain with a CPA and would rather accept this mysterious “standard rate”.

Any idea about it 7 months after the original post? :grinning:

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I can maybe provide a more detailed answer to my own question now, having recently finished dealing with it last week.

After doing what I wrote above back in June with all my monthly invoices and (some) wire transfer receipts, plus a simple table summarizing my income from each client converted to TWD using the Ministry of Finance’s table of annual rates, the tax office finally got around to e-mailing me in December to ask for more info. Specifically, they wanted to know whether I was dispatched by an overseas company to work in Taiwan or
locally hired. Then (this is essentially the official regulations for documentation needed):

If you are dispatched, please give me the document verified by your income-sourced country tax authority or document verified by a income-sourced CPA with a copy of the professional license. If your are locally-hired, please give me the contract of current job and the resignation letter of previous job.

I responded to that to say I was neither sent here by an overseas company nor locally hired, don’t have an employer/employee relationship with any of the clients, and have no tax liability in any of the countries I’ve received employment income from (UK and Japan, primarily) or into (UK, primarily), so l wouldn’t be able to provide the requested documents and had already given them everything I have. At that point, they said it was fine and they’d accept the previously supplied documents. I’d already paid the tax back in July and genuinely don’t have any more documentation anyway, so not sure what else they could have done. :man_shrugging:

(Not entirely related to the original question, but possibly relevant to other gold card holders too, especially remote workers who switched to the gold card when the plague arrived - the second part of the e-mail was about previous tax years I’d been here on visa exemptions for >183 days before getting an ARC and had…neglected to file tax returns for. :angel: It seems that, in contrast to what I’ve read for a regular ARC, where not having filed taxes can come up during the ARC application, they don’t check this during the gold card application but instead when you file your first tax return. Reluctant to post too much about that in a public forum, but it’s fully sorted now - just had to pay some overdue tax and a bit of interest. :innocent:)

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Thanks so much for the update. I will prepare the documents that you mentioned (great idea to also attach a table to summarise your incoming salary in NTD :love_you_gesture: I will copy that) and see how it goes.

May I ask one more thing, without of course getting into details about your salary. I am reading that overseas income is not taxed if lower than 6.7 millions. Is it true or did you pay your taxes with the regular rates? Or did you file it as local income?

Not trying to evade nor elude. I just want things to be done properly so that when I apply for APRC next year and present my tax statements I won’t incur into any trouble with NIA. I am already expecting a lot of usual and unusual nonsense for them :rofl: :rofl:

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It’s only overseas income if you earned it while outside of Taiwan. The onus is on the tax filer to prove that the income was for work performed outside of the country. If you were here for the entirety of 2021, it’d be hard arguing that you earned any income that the TW income tax rate doesn’t apply to.

The 6.7 mil exclusion is for AMT, not salary/wages.

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Yes, like @wfh-jjw wrote above, the 6.7 million is for AMT not income from work performed physically in Taiwan, so everything done physically in Taiwan should be filed as local income. (In my case, for some of the previous tax years, I was actually physically outside Taiwan when I performed a small amount of the work - it seemed to me from the regulations that I would have been able to exclude that from my tax returns, but I didn’t bother in the end because proving it, while possible, would have been onerous).

May as well also mention here that I did an overall table at the top with additional monthly tables for each client (based on the month the payment was received rather than the month the work was done, which I believe is standard, so my tax return for 2020, say, included income for work done between Dec. 2019 and Nov. 2020). The second set of tables may not have been necessary, but I wanted to make it clear how the total income correlated with the invoices for each client because it wasn’t always obvious (for one client, I sometimes submitted two invoices in a given month because of how their system works, and for another client I sometimes submitted invoices covering two months when I hadn’t done enough work in the first month to justify a separate invoice).

Hope that helps. Good luck. :slightly_smiling_face:

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Did you hear anything from the NHI after filing tour taxes? Did they adjust your monthly premiums for the future or even retroactively based on your income?