Maximum transfer amount before taxes - and other details

I think this may have originated from a misunderstanding about the nature of the transfer. This isn’t “foreign-sourced income” or “income”. You’re just transferring money to yourself, right?

I mentioned it would be a foreign-sourced income.

The link posted by GuaradianAngel also says
"Please note that overseas salary earned for work done in Taiwan is not applicable for AMT. Also if you are a tax resident, the tax office will try to tax you on your worldwide salary. It is up to you to provide proof that certain salary was not earned from performing work in Taiwan or for a Taiwan client. "

The bank may think you earned this income while working in Taiwan (but you got paid abroad). And thus, they probably assume they should preemptively deduct 20%. The good news is that you can probably get that back if you can prove you earned that money abroad and not by working from Taiwan.

Better may be to tell the bank “this is my money, just moving it between accounts” than to use terms like “income” that may confuse them.

It’s not though, judging from what you’ve written. If you’ve already earned the money elsewhere and are now just transferring it between countries, the transfer in itself doesn’t constitute “income”.

If you’re required to file taxes in Taiwan, this is a separate issue, which would be solved by declaring the income to the tax office. And if you were physically in Taiwan while you conducted the work, even if it was paid overseas, it wouldn’t be foreign-sourced income anyway - it would be Taiwan-sourced income.

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