I am writing from Singapore and am glad to find this website as I am exploring the possibility to work in Taipei. Am in the midst of talking to a potential employer, can anyone enlighten me on the tax structure in taiwan for an expat? So I would know how to continue my negotiation with the company. Thanks very much!!
I just moved here from Malaysia, also being an expat but under local employment now.
As far as I figured they deduct in general 20% in advance and at the year’s end (fullfilling certain conditions) the actual tax will be calculated. No idea how much that will be though but most Asian countries seem to ask pretty low rates (as compared to Germany where I come from).
Make sure the company provides a proper housing allowance, something in the area of USD1500-2000 will do - unless you have 10 kids.
Thanks for the reply, one question, when you said they deduct 20% in advance, do you mean from your monthly pay just like in Malaysia ?(I worked in malaysia before too)Tks.
Yep, the company will take of the percentage from the salary paid (before it goes into your account) and direct it to the government.
May I ask what you do / did in Malaysia?
I worked for a Pay TV station in KL for 2.5 yrs.
Under 183 days:
If you work for less than 183 days in Taiwan then the employer must deduct what is called “Withholding Tax”. This is currently 20% and is non refundable.
After 183 days:
If you work for more than 183 days then the employer should begin to deduct tax at a lower rate, usually 10%, and the entire amount which you have had withheld during the year is offset as a credit against your income tax bill for the year.
Tax Rates here are quite good, they start at 6% rising to 40% dependent on income. There is the normal tax free allowance plus allowances for being married, kids etc etc. The table below gives tax rates and income split for the 2001 tax year. I am not sure if there are any changes for 2002 so it may not be 100% accurate but it is close enough: NT$
0 - 370,000 Taxable income 6%
370,001 - 990,000 Taxable income 13%
990,001 - 1,980,000 Taxable Income 21%
1,980,001 - 3,720,000 Taxable Income 30%
3,720,001 - Taxable Income 40%
Every employer, bank, etc. should deduct the appropriate amount from you and that includes withholding on interest earned, etc. Additionally, all of them should provide you a tax deduction statement that you must supply when completing your tax return.
The cost of National Insurance etc equates to about 1500 NT per month at the highest level, there is no concept here of a CPF fund as there is in Singapore.
Autsch, that’s going to hurt!
I hereby retract my former statement (“No idea how much that will be though but most Asian countries seem to ask pretty low rates …”).
Thanks Rascal and NeillM for all your inputs, it’s very usefull.