How to deal with tax residency?

Hello everyone,

Would like to know how does tax residency work in Taiwan and what’s the best way to deal with it.

I am technically a tourist so I don’t have an ARC or anything like that. I stayed exactly 85 in Taiwan this year. Now I’m in the Philippines for my visa run and about to return to Taiwan in a couple of days.

I am unemployed and don’t have any income at the moment, as it was the same even before in my home country. (I flew to Taiwan just about one month after graduation).

Now the thing is, athough I wish to stay in Taiwan longer than 90 days (and that’s why I am doing visa run and will probably do at least one more), I am not really planning to settle there for the long run, so I refrain from looking for a job or enrolling in school.

I am aware that not having a permanent resident status makes everything difficult, but I o

Not sure what your question is: If you don’t have any income, are unemployed and are not planning to work in Taiwan, you most likely won’t have any issues being here as a tourist long-term (well, except for running out of money potentially…).

Tax Residency will only start to matter once you actually earn income (from a job or from investments) or want to start working. Then, however, the lack of a work permit as a tourist would be the foremost issue you’ll need to address.

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Thank you for your reply. I accidentally submitted the post before I finished typing my question and not sure how to edit it.

Basically as I said, I am a tourist at least for the time being, but I have read that after 183 days I automatically become a resident for tax purposes. Does it apply for tourists too? I am concerned because technically speaking after several visa runs I will surely be in Taiwan for over 183 days within this calendar year (2023). So that’s pretty much my question, is there anything I should do to prevent any illegal action from my side?

Now with that being said, even though I don’t plan to work for a Taiwanese employer, I have this idea of starting an online business at some point in the near future, and not so sure how do the Taiwanese authorities see this matter and especially as someone without ARC. Thank you very much!

Technically, you’re not supposed to do any work while in Taiwan as a tourist. Doesn’t matter for whom you work (Taiwanese company, overseas employer, your own business, …). Not so much because of tax reasons, but because your visa doesn’t include a work permit.

Yes, even as a tourist you can become a tax resident. The tax authorities will still gladly take your tax return even though you’re a tourist. It’s completely legal if all your income is investment income, for example.
However, be prepared for some follow-up questions from immigration if you declare income from employment without having a work-permit…

I honestly don’t know how high the chance of getting caught actually would be (some people apparently have been doing those visa-runs and some odd-jobs in between for years and years - see some other threads) - but be aware that getting caught of working without a work permit might result in deportation and possibly a reentry-ban.

If you want to be on the safe side, you can get an Employment Gold Card if you manage to qualify (which includes an open work permit) and file your taxes in Taiwan. Or, you can start your company in Taiwan and basically issue yourself an ARC (well, with some help). The only other option would probably be getting married…

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Okay. I see what you’re saying. So there are two important things to consider here:

  1. Tax residency for tourists is irrelevant unless it’s income from investments or any other income source that is NOT work.
  2. If it’s income from (any kind of) work, a work permit is is fundamental before anything else. Thinking about it, it makes a lot of sense. Generally speaking, reality is that as long as I am “only” a tourist, the safest bet is not to work at all.

Then I suppose that the best options for me will be either starting my own business in Taiwan or trying to obtain a Gold Card, correct?

Thanks again!

I suggest you consider the over 40 countries offering digital nomad visas.

They don’t need a digital nomad visa if they’re really not working.

You’ll become tax-resident in Taiwan after 183 days irrespective of visa status, but if you really have no income and are just living from savings or something that shouldn’t be an issue.

You might be asked at some point where your living costs came from, but Taiwan hasn’t so far seemed very proactive in pursuing that. If you later tried to get an ARC (this doesn’t seem to apply to the gold card, for some reason) or filed a tax return in a subsequent year, immigration or the tax office might ask you about why you didn’t file taxes this year and how you supported yourself (which you’d be expected to prove), but if you’re really not working as you wrote you should presumably be able to explain that.

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FWIW I lived here for a few years on visa-free entries before applying for a gold card and they did not ask me what I was doing here during that time. When I went to file taxes as a resident my first year, I was told to pay back taxes for previous years (the penalties were practically nothing) but I was never questioned by immigration.

Yeah exactly, that’s why I mentioned that they don’t seem to ask when getting a gold card, but I’ve read of people being asked when they get a regular ARC.

Hi,

Can I ask you a few questions?

  1. You started filling taxes BEFORE or AFTER you got your gold card?
  2. What penalties are we talking about?
  3. Are you self-employed/a freelancer by any chance?

I’m in a similar situation and I’m not sure how to approach this.

I filed taxes for the first time (this time, I’ve been a resident in Taiwan before) after I had my gold card. I used US tax documents to apply for the gold card. It’s been a couple years so I don’t remember what the penalty was but it was some extremely low interest rate, possibly with the maximum number of days capped, came out to maybe a few hundred extra NT per year. If you can read Chinese you can probably look it up online. And yes I am a freelancer, I do my banking in the US and don’t have any Taiwanese direct clients.

I would suggest just going in to the tax office with your info and asking. You can always refuse to accept their calculation and find your own accountant if you want, they won’t retain your info.

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