Tax implications of being abroad more than 6 months in a calendar year

Legal Taxes
1

I recently got my APRC. I’m self-employed with a LLC in the US that generates a small yearly income which I happily pay taxes on each year here in Taiwan.

For taxes, which of the following would be the case if I’m out of the country for more than 183 days in a calendar year?

  1. I need to pay flat 18% rate on the entire income from the LLC.
  2. I need to pay flat 18% rate on the amortized income from the LLC (e.g., 49% of it if I’m out of the country for 184 days)
  3. I don’t need to pay anything at all, as I’m not a tax resident.

As far as I understand, it seems like the answer is #3! If out of the country for 183+ days, I’m not a tax resident. The withholding at the 18% tax rate does not apply either because none of this income is generated in Taiwan proper.

Is this correct? Or am I missing something?

I saw other threads in the forum related to this, but most of them seem to relate to tax witholding rate on salary received in Taiwan, and not foreign income for this sort of situation, hence the new thread.

2

Yes, that is also my understanding.
Note however, that this is only the case if you’re not a citizen.

The rationale behind that seems to be that income received from abroad for services rendered in Taiwan counts as “Taiwan-sourced” income. However, this designation only applies if you’re a tax resident. And foreigners can only be tax residents in Taiwan if they stay for >183 days in a specific tax year.

So if you’re a foreigner and stay for less than 183 days in Taiwan in a specific year, your overseas income (even if it was received for services rendered in Taiwan), should not be taxed.

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3

But you will be a tax resident of the other country, which might make taxes even more complicated. Assuming you do not live in multiple countries for only a few months each.

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4

Reminder: For many types of APRC, you must apply for an exemption if not staying in Taiwan 183 days per year. Otherwise your APRC could be revoked.

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Regarding that request for exemption form for APRC holders—it requires a “permanent” address in Taiwan. So if an APRC holder leaves for a couple of years (and does not keep paying rent on a place in Taiwan, and does not own property in Taiwan) I wonder how this would be handled?

Maybe I could make my permanent address the NIA Office. lol

Guy