I’m from the UK, classed as non UK resident for tax purposes, been in Taiwan for a few years and am planning on setting up a Rep Office here for a company in the UK for which I’m a director. I just had a couple of questions regarding hiring myself to work for that office that I couldn’t find answers to in the Rep Office sticky thread.
Firstly, I’m not classed as an employee of the UK Limited Company (just a director) and was wondering if I hired myself locally to work as the Rep. Office manager in Taiwan, would I first have to declare myself as an employee of the UK Head Office too? There seems to be no requirement in Taiwan for a Rep Office manager to be dispatched from the company’s head office and as I’m not classed as UK tax resident and wouldn’t be required to pay National Insurance (UK Social Security) in the UK, registering myself in the UK as an employee for the purposes of PAYE (Pay as you Earn – the mechanism UK companies use to deduct tax and National Insurance before paying employees) seems a bit pointless.
Secondly, what’s the best way to pay myself a salary? I checked with the Ministry of Economic Affairs, Ministry of Labor and Ministry of Taxation in Taiwan and they all told me that they don’t care which of the following 3 options I use. The only thing I was told was that if I choose either option 2 or 3, I would have to get a UK chartered accountant to certify my overseas income amount every year before I can file taxes here (as the salary income is classed as overseas income).
The UK head office sends money to the Rep Office annually or monthly to cover all salary, office rental etc. expenses and salaries are then charged and paid through the Rep Office.
The UK head office directly pays me monthly into my UK personal bank account.
The UK head office directly pays me monthly into my personal Taiwanese bank account.
Option 1 is, as far as I know, the norm when it comes to remitting expenses to a Rep Office and you only get hit with GBP to NTD transfer fees once (if you remit from the head office annually). Additionally, in this case, as my salary would be paid from Taiwan I wouldn’t need to pay the UK CPA to certify my overseas income (which saves quite a bit of money).
Regarding options 2 or 3, I still have the UK CPA fee but with option 2, I avoid the transfer fees every month. Plus my UK bank account allows me to withdraw money from Taiwanese ATMs without any services charges so I prefer it to option 3.
However, if I go with either of these two options, wouldn’t I effectively have to register myself as an employee of the UK head office for PAYE as I’m being paid directly from there? Or is there another way to classify this salary expense when filing the annual accounts of the UK head office every year?
I do know some of the answers , but they relate to my situation , which is slightly different to yours . The critical thing is where the money is earned . USA is different but the U.K. and taiwan seem to say that your are subject to taxation in whichever country the wage is actually made . I would suggest you continue voluntarily paying your pension contributions in the U.K., to at least attain the minimum period ( 30 years or so ? ) of contributions for a full pension entitlement .
As far as I know , you don’t have to resident to continue your contributions in the U.K. . You can also catch up ( to a degree) with a lump sum payment. Would need more details on your ARC status to advise more . Of course better to pay all taxation here than in U.K. . My advice is to talk to Sam at jusregal in Taipei … he will give initial advice for free . Sorry can’t help more .
Yep, that’s my understanding too from the research I did before posting: as long as the income is for work done while physically located in Taiwan, regardless of where the money is paid, my company and myself (as an employee) would still have to pay tax, labor insurance, health insurance and pension in Taiwan, which I’m more than happy to do. There’s one exception related to the UK Taiwan Double Taxation agreement but I won’t go into it here as it’s not relevant for my situation.
Also, regarding the UK State Pension, as you correctly pointed out, employees working abroad need to make voluntary National Insurance (NI) contributions to keep earning credits that can eventually be used to get a pension (one day!).
If you don’t mind me asking, when you set up your Taiwan Rep Office, did you employ yourself in the USA (assuming that’s where your head office is located) and then second yourself to Taiwan? Or did you just sign an employment contract in Taiwan with the Rep Office (a requirement for obtaining a Work Permit here)> Also, if you feel ok sharing, how do you pay your salary? Do you use one of the 3 options I mentioned in my initial post, or a different way? Thank you!
Thanks also for the JusRegal contact, I’ll try to get in touch with Sam!
I have an APRC with Open Work Permit, so I did not need the Rep Office for that. I did obtain an ARC for an employee. Bit different as mine was registered in HK. Sam would be able to facilitate getting your ARC for yourself , I am sure. You can get different Countries to pay Taiwan and pay Taxes here. You will have to be honest and specify where the money is from and it’s purpose ,but Taxation is very reasonable here. The USA is an exception as their IRS requires Filing of all earnings , anywhere. Payment charges and Bank fees are a bit of an issue. If you are buying from the USA, sometimes better to buy USD and hold reserves.
So you pay your salary directly from your overseas office into your Taiwanese bank account? Do you also, as the Ministry of Taxation claimed, have to get a CPA in that country to certify your income every year before you can file a personal tax return in Taiwan on that income?