As you are probably aware from my other posts, I am planning to come to Taiwan in August and the main idea was to study Chinese at ICLP.
I actually applied to ICLP and got admitted, initially my goal was just to study Chinese full-time. However, due to the Covid-19, it seems the only way to possibly enter Taiwan before September is to apply for a Gold card, and I actually did 11 days ago.
A friend of mine who has a successful startup in Europe, once he got to know about this Gold Card, asked me if I would be interested in working for them remotely, and offered me a good position with a very decent salary that would allow me to live really decently in Taiwan.
However, I will be a contractor, and they WILL NOT set up any office in TW since the work is done for European customers only.
So, my new plan would be to enter Taiwan, do not go to ICLP and maybe just enroll in an easier program at NTNU or CLP maybe.
In the evening, I would be working for my friend’s startup and:
I will be paid in EURO to a European Solo-Ownership company bank account that I will set up;
This entity will pay me a monthly salary.
I will carry out work ONLY to European customers.
I won’t work on anything Taiwan related, not doing meeting in Taiwan, not receive payments in Taiwan etc.
I am OK paying taxes on this income in Taiwan, so I would like to declare it.
Yes, that will be possible under the Gold Card, because it comes with an open work permit.
As you pointed out, you would also be liable for Taiwanese income taxes if you perform work in Taiwan, even if the employer is in Europe and all financial transactions are handled outside of Taiwan.
This is misleading. You have to file income taxes, but as long as there is an agreement with the country you have been paid in, and tax was withheld at source, it is unlikely you will pay any income tax in Taiwan (even if taxes were not withheld at source - but this would be more of a tax problem in that country, where you would owe taxes, not Taiwan). OR if your income is very high, but that goes into AMT (Alternative Minimum Tax) territory, where you need to be making over 6 Million NT$.
AMT for overseas income is only effective you are a Taiwan tax resident and overseas income is over 6.7 million NT. The tax is 20% on income above this amount. However overseas income over 1 million NT should still be filed. Pension payments are only taxed for the salary you earned while in Taiwan.
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.
I believe you are misinterpreting this section,
" Please note that overseas salary earned for work done in Taiwan is not applicable for AMT".
However, work done online/remotely for a company in Europe, paid into a non-Taiwanese bank, is not that. It is not considered “work done in Taiwan” (it is Overseas income), and if taxes have been paid in that country, and there is a tax agreement with that country, everything should be fine (especially considering Taiwan’s taxes are so much lower than most European countries). Still, of course refer to an accountant for an expert opinion.
@squall1 Is this “Foreign Based Income” (money earned in a foreign country and deposited into a foreign bank account)? Or income earned as a resident of Taiwan from a Foreign company and paid in Taiwan? These are 2 very different situations. And is the money deposited into a Taiwanese bank account? Or an account in another country? There are a lot of factors that need to be taken into account, and I am curious as to which exact scenario your advisor at Deliotte Taiwan was speaking to …
For tax purposes, work performed in Taiwan is work performed in Taiwan, regardless of where the company paying you is based. It only becomes overseas income if you work overseas. (At least that is what I was told by the Taiwanese tax authorities.)
But as you said, talking to a tax accountant can clarify this issue.
Highly debatable if the company has no physical presence in Taiwan.
Regardless, what you can do is create an offshore holding company in SG/HK to receive the funds and pay them back to yourself as dividends.
Plus to be perfectly honest if you’re not looking to renew the gold card filing tax here would be at your discretion. That’s one of the perks of having an APRC.
The concern of the tax authorities was that multinational corporations were sending people to Taiwan but paying their salaries to accounts in low tax jurisdictions. For a while this was quite a common arrangement. If you aren’t rendering service to a company with a nexus in Taiwan then the income isn’t taxable. But to play it safe there’s also the dividend option.
The easiest option for me is to set up something like XOLOgo.
Send an invoice every month to my friend, getting paid, for example, 1000 EURO and at the end of the year declare 12000Euro to Taiwanese tax authority, proving this with invoices/bank statements.
Those funds will probably be deposited to a Transfer-Wise account or something like that, not in Taiwan btw.
