Gold Card holder working from Taiwan for foreign (US-based) employer with no Taiwanese presence

Legal Legal - Work
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I am currently a Gold Card holder, which, according to their website, is “perfect for digital nomad / remote workers” because it “contains an open work permit that allows you to work for any employer.” (I’m a digital nomad / remote worker, is this card suitable … | Taiwan Gold Card).

I am currently arranging my travel with my US-based company, who has been very supportive in the process, but is concerned about legal/tax/compliance obligations that they may be subject to. My company does not have any presence in Taiwan (no entity, no office, etc.). They are US-based, and pay me W-2 income to my US bank account.

I am already familiar with the 90 and 183 day tax rules, and am aware that I will owe personal income tax to Taiwan for the time I spend working there (18% rate above 90 days and progressive above 183). I have confirmed with the Taiwan Income Tax Office that these taxes would be paid personally, via check, since my employer does not have a Taiwanese entity from which to pay me or withhold taxes.

The only problem with this entire process is that I have been unable to find any resources or confirmation that me being physically present in Taiwan would not cause them to have a legal nexus there, and therefore owe NHI payments, be subject to Taiwan employment laws, etc. The closest I have found is Article 10 of the Income Tax Act (Income Tax Act - Article No Search/Content Search Result - Laws & Regulations Database of The Republic of China (Taiwan)), which defines a “business agent” in a way that seems to exclude the work I would be doing. In other words, since I am not meeting with clients, signing documents, or acting as the company’s legal representative, I would not be a business agent, and therefore the company would not meet the presence test.

I recognize that this is a very specific issue, but to me it seems that there is a disconnect between the Gold Card office saying “yes, you can work for any employer, even remotely” and the legal side of the process which does not have clarity for these situations.

TL;DR - Gold Card holder working remotely for US employer with US W-2 income, how can I assure my company that my presence won’t suddenly make them a Taiwanese entity subject to Taiwanese tax and compliance?

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PWC’s tax summary says:

The term ‘permanent establishment’ only exists in the underlying double tax agreements (DTAs) signed with Taiwan. Taiwan domestic tax regulations only refer to an FPOB [fixed place of business] and business agent, which generally follows the definitions of an FPOB and agency PE in the Organisation for Economic Co-operation and Development (OECD) Model Tax Convention.

Taiwan and the US don’t have a tax treaty, so it falls Article 10 of the Income Tax Act as you found. Talking with the Taiwan tax bureau in the past, they do make reference to OECD rules as a basis for various things.

On those, there’s a lengthy write-up here.

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Work for them as an independent contractor / freelancer. You might even consider starting a business somewhere in the world and pay yourself a salary. Then, your „employer“ will become your client and should not need to deal with any of those aspects.

Of course, then those questions will shift from your client to you - also see my thread for some time ago Working remotely for a self-owned foreign company without an office in Taiwan - legal?

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Thank you for these links; I think they address some of the issues, but a few things still stand out to me.

For instance, the concept of an “employer” permeates nearly every official regulation, document, etc., and is not necessarily addressed/clarified when that employer is a foreign entity, even without a permanent establishment.

Take for example, National Health Insurance (NHI) contributions. According to the NHI

…those people who get work permits with ARC must join the National Health Insurance program by their employer starting the day they are employed.

There is no mention of what to do when the employer is a foreign entity without a permanent establishment. Any competent company’s legal department is going to read this and say “well now we have a compliance obligation on behalf of our one employee working from Taiwan.”

I suppose my point is that the Gold Card program openly advertises as being available to anyone with any employer. But as soon as you start to dig into how that would actually work, it becomes a massive regulatory issue. If I could point to some kind of official notice, document, etc. that simply said “Taiwanese ARC holders who are not operating as business agents on behalf of their foreign employers do not create any compliance obligations for those employers,” it would help make it much easier for them to understand.

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This would certainly solve all of my problems, but unfortunately isn’t possible in my situation. I need to remain as a W-2 employee.

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There is a webinar that seems quite related to this topic on March 30. A lawyer from Taiwan is presenting a topic about “Permanent Establishment” rules in the context of employees stranded overseas due to covid: Otters Online Pte Ltd

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Did you end up coming to a resolution on this and/or acquire any definitive information? Curious about this for myself as well! Thanks!

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This is my situation with a HK employer.

Per HK law and contract I’m a full time employee residing and working overseas, so no fiscal or contributional obligations in HK.

However, since my employer has no physical presence in Taiwan, per Taiwanese law I’m self employed. So the taxes must be declared by myself and paid accordingly.

You are required to enroll to the NHI after 6 months residence regardless of ur employment status (if u work for a TW employer they would enroll u immediately) and technically as per NHI premium determination, u will be considered jobless and will pay the minimum. Dunno if this is a loophole, but this is what I’m currently doing, the NHIA couldn’t use my foreign originated income (even though paid directly to a TW bank account) to determine the premium.

Regarding ur US tax obligations, I have no clue since I’m Italian and we don’t need to pay any taxes in Italy as long as we do not live there and r properly registered as resident abroad.

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Therein lies the crux of the biscuit, methinks.

Where did you find this explained? :thinking:

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Cannot understand why they cannot use your income paid to your Taiwan account for NHI contributions. So do you pay the same rate as someone who is unemployed?

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My understanding, based on my liaising with NHIA and Tax bureau, if ur employer has no structure in TW (as at least a representative office, branch or subsidiary) where the employer is registered as insured unit, NHIA considers u basically unemployed, and I indeed pay the minimum of 826NT/mo notwithstanding me showing them my employment contract and appointment letter. They say it’s not relevant for them.

At the tax bureau, which I just visited and got my tax statement, they consider me as self employed, so need to declare all the income received as salary supported by a salary statement issued by my employer and certified by a CPA (had even to provide copy of the CPA licence).

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Sounds like a good deal for Gold Card holders who have employers with no Taiwan base.
Maybe I should apply for one. lol

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That seems pretty definitive, thank you for the detailed and cogent explanation! :notworthy:

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In your case, I would assume the nature of your business here makes much (all?) of this irrelevant though?

It seems lIke the Gold Card isn’t really playing much of a role beyond providing the right to live here. The only real question at hand was whether the foreign entity incurred any obligation under TW law, and it seems the end result was @Mataiou simply being (re)classified as self-employed, which renders that question moot.

@fifieldt might have more details on whether other govt agencies would interpret the situation differently though. :thinking:

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Pity Gold Cards and being able to open small business licenses weren’t available back in 1988 when I moved here. I think I’ve been cheated lol

He and I are both citizens so I assume he is no longer under Gold Card Status anymore?

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