Filing taxes in Taiwan for US earned income?

Has anyone been in the situation where they’ve needed to file tax in Taiwan for income generated from the US with a company that has no presence in Taiwan? Do you just take your W-2 form to the local Taiwanese tax office and file your Taiwan tax based on that? Thanks.

B.

AFAIK you wouldn’t report that tax here; report it when you file your US taxes with the IRS.

Taiwan doesnt tax your earnings earned elsewhere.

I think you don’t need to file any taxes in Taiwan if you’ve stayed here for less than 90 days during the tax year, but after 90 days they (the Taiwan tax office) told me that anything’s fair game regardless of how the income is generated, even if I’m just here on a visitor visa. That sort of makes sense to me, particularly if I’m able to claim the income in the US as a part of my foreign earned income exclusion (up to US $91,400 apparently).

http://www.irs.gov/publications/p54/ch04.html#en_US_publink100047498

I guess there’s also the idea that if you don’t report it in Taiwan they’re not going to find out since everything’s happening stateside (deposits into US bank directly), but the idea that it might come back and bite me in the rear a few years down the line makes it somewhat unpalatable for me.

B.

Right, though if the income is generated for services rendered to the American company while you’re physically in Taiwan (say by doing the work remotely over the Internet), that would be considered local earnings correct?

B.

Ok, not a tax attorney here. So you best get the advice of one if you have substantial income.

Technically speaking Taiwan (unlike the USA which taxes your entire world wide income) does NOT tax you for income earned abroad that has no relation to your being in Taiwan.

So for example you have earnings derived from Share holdings in the USA while you physically live in Taiwan. This income is not taxable as far as the TW tax bureau is concerned. But this income is of course taxable per the IRS. You will not need to file this income with the TW tax bureau.

The money you earn in TAiwan is however possibly taxable per the IRS because the IRS taxes your entire worldwide income EXCEPT for a certain amount of SALARY/Wage/Fee payment after you meet certain criteria, such as the foreign presence test. You will still have to file this income with the IRS but are exempt up to a certain amount. But if i remember correctly you should not state that this salary income is NOT taxable per the TW govt.

So for example:

You have share holdings in the USA and got 100,000 dollars in income from those shareholdings. You must file these earnings with the IRS. Meantime you also work for an American company that stationed you as branch manager of their TW office in TAipei. And for this you receive another 100,000 US dollars a year. But you receive half of this income in the USA and half of it here in TAiwan. You must declare this 100,000 as income per the IRS but may be exempt up to the current maximum if you meet the foreign presence test, etc. But you still have to file. The TW govt will consider this entire 100,000 as income earned in Taiwan by the way, even if you “hide” 50,000 of it in the USA. This is tax evasion per TW law. But it doesnt stop a lot of people doing just that.

Now lets say that you also have investment income in a Taiwanese Mango ice shop as well as a Beef noodle restaurant and make another 100,000 USD per annum . All of this income will be subject to IRS taxation as it is not Salary/Wage income. And also be subject to TW tax office as income earned in Taiwan.

However, this brings up double taxation. A Taiwanese person making 100,000 on the mango ice and the beef noodles will only pay TW tax but not US taxes.

For this reason I do believe the USA and TW has been trying to reach a tax agreement. I am not sure what the progress is on this.

Again, im not a tax attorney by a long shot and some of the above may have changed.

I’m in pretty much the same situation, and the people at the tax office were mystified that I would try to report my income. “We have no way to check it”, they kept saying, the implication being that I had no reason to report it.

They also said that the rule is changing from next year, and people are expected to report their overseas income from then on. Hah, hah.

In the end, the girl helped me report income matching my deductions, so that I had some reported income on file but didn’t actually have to pay any tax.

Right, though if the income is generated for services rendered to the American company while you’re physically in Taiwan (say by doing the work remotely over the Internet), that would be considered local earnings correct?

B.[/quote]

Debatable . Lets say you live in TAiwan because you are married and have two dogs and five cats. But you have a particular skill in international banking and work for Citibank on a project in Zimbabwe and got paid 100,000 US dollars for this. And you are a US citizen.

You will of course have to declare this income to the IRS and because it is not Salary/Wage income all of this amount will be subject to US taxes. But none of this has to be reported to the TW govt as income. Because TW does NOT tax your income derived from your work outside of TW. It doesnt matter if you made this 100,000 from one physical trip to the USA or earned it largely by working on the project while stationing your butt in Taiwan. This is money that is of no relation to TW.

You will be liable for TW govt taxation if say you work for an American company while you live in Taiwan for work done in Taiwan by going to work at the company’s local office on a daily basis. The good news is that a lot of this money will be exempt when you meet the IRS guidelines for foreign earned income exclusion (form 2555 i believe).

And say you also write travelogs and get paid for it. You wrote one about Taiwan for the Readers Digest and got paid 2000 dollars american and wrote one about Tibet and got paid 2000 dollars american by REaders Digest with the money deposited into your Taiwan account. Technically the one about Taiwan MAY be subjected to Taiwan tax, but in reality will not be as most people will not declare this income. While the one about Tibet has no relation to TW and your being in Taiwan.

There are many liaison offices in Taiwan where a foreign expat may spend a good portion of the year in Taiwan. And he may be paid a substantial amount of money. In most cases these people do NOT pay TW taxes or declare this income. But they may also not qualify for foreign income exclusion for this reason. They will also not have an ARC or the national health insurance.

p.s. someone mentioned in the maryjane thread that Taiwan does what the USA does in about 10 to 15 years.

So Yes, the Taiwanese TAx bureau has figured out that it will get a tremendous windfall if it can get Taiwanese to pay taxes on their world wide income, just like the IRS . Part of this stems from the fact that over one million Taiwanese now live on the mainland but maintain homes and families in Taiwan. They make money over there but still have obligations on the rock. The TW tax people want to tax this China income. Good luck on that but.

Lets hope its all too complex for them and they give up this idea.