I’m a W-2 US Employee working at a small company (< 400 Employees)
Questions:
1.) What are the impliciations for my US Employer if I work remotely in Taiwan with the Gold Card? From my understanding, I myself are responsible to pay taxes to the Taiwan Government at the end of the tax year so then are there any implications at all for my company?
2.) Other than working hours difference, what other information would I need to supply my Employer? I guess it seems from their point of view, not much changes? — I would still have a US bank account and a US address.
It’s a gray area. If you are the only employee in Taiwan and you are not C level then 99.9% chance nobody cares. However here is the by-the-books answer:
“ A non-resident company is taxed on income derived from Taiwan sources. A non-resident company with a fixed place of business (FPOB) or business agent in Taiwan is taxed similarly to a resident company (i.e. subject to filing of an annual CIT return based on the same CIT rate provided above).”
Which means the US company has to file and pay Taiwan taxes as if it were a Taiwan company.
It likely doesn’t apply to you, though if you are starting to meet business clients in Taiwan, sign contracts etc then it’s riskier.
Perhaps you can just ask your company. It’s up to their compliance team.
No changes here, assuming you maintain tax residency in the same state.
Yes, in theory, your employer might be liable for corporate taxes in Taiwan on the income you earn them because with an employee working from here, they could have a permanent establishment at your place of work (even if you work from home).
In practice, no one will probably care.
But it’s the (theoretical) reason why many companies aren’t to keen on having direct overseas employees and might use a PEO or similar instead.
Yes, you would owe taxes in Taiwan on your salary, because it would count as “Taiwan-sourced” because you earned it for work being performed in Taiwan. I think the US and Taiwan still don’t have a double-taxation-agreement in place, so you might get double-taxed.
I guess this is the part that confuses me, I think I may have to consult a Taiwan accountant. So I would pay personal income tax at the end of the tax season, but then my company would possibly also have to pay corporate taxes as well?
That is correct, but US does have Foreign Earned Income Exclusion (FEIE) tax credits which I should be able to claim.
Yeah fixed place of business company tax rules apply in pretty much every country.
The US equivalent is 1120-F, and foreign companies with employees in the US have to fill it out, or open a branch/subsidiary.
Taiwan is not as organized in this area. Unless you start getting noticed (such as your company generating large profits in Taiwan which are attributed to you), the Tax bureau has bigger things to worry about.
If you are just a regular employee at your company, then I’d ask your compliance team and if they’re OK with it, you have a paper trail and they can deal with any consequences.
Airbnb allows their engineers to work fully remote, but only up to 90 days at each location, likely because their compliance team doesn’t want their employees having fixed place of business in any country: https://news.airbnb.com/airbnbs-design-to-live-and-work-anywhere/
I work remotely for a foreign company. Does the foreign company need to declare taxes?
If the foreign company has no business premises or revenue in Taiwan and only has employee expenses, the foreign company can subtract its expenses from its income, resulting in a negative number, and therefore does not need to declare taxes. However, the Taiwan-based employees of the foreign company must declare their personal income tax in accordance with the law.
Why do you need to figure out company tax though? Can’t you ask your company HR/tax/compliance team for a yes/no on whether you can work full time from Taiwan?
Company tax is pretty complicated to understand. You’d need access to the company accounting books. The above says you need to know the company’s Taiwan sourced revenue to be able to know whether company has to file tax.
From your end you just need to do personal tax and get an OK from your company to be able to work remote from Taiwan.
The rub is your company might have crap finances and focus on compliance if anything you can provide from googling and asking on the forum affects their answer regarding implications to them from an employee working full time internationally. ;D
A word of practical advice: Don’t bring up these potential issues yourself when your employer might not know / care about them.
If they’re having doubts about the setup, then show them the information on the Gold Card website saying that all this is fine.
By being here on a Gold Card and planning on paying taxes in Taiwan, you’re probably already more compliant than maybe 80% of all the remote workers in Taiwan right now (and that includes Taiwanese citizens working for overseas companies and “forgetting” to declare their income with the tax authorities).
So don’t worry too much about those tax issues (unless your employer takes it as a reason or pretense to not allow the setup which I have seen happening).
In your situation, I would be more preparing to explain to your employer how you will handle time zone differences (working US times from Taiwan is definitely an adjustment!) and potential in-person-meetings (who will pay for the travel expenses and such if an in-person meeting is required?).
I think that’s rather what you should be thinking about now as you’re the one who needs to solve these issues - and leave the tax and compliance to your employer. If they don’t really care, then good for you - but don’t make the mistake of bringing up the topic to them and potentially shooting yourself in the foot…
Adding to the Airbnb comment, most large US tech companies have implemented remote work policies in certain foreign countries as a result of the pandemic. However, the time is limited to 90 days because of the tax implications the company would incur if their US employees were to work in a foreign country for longer than that, even if the company has a branch in that foreign country.