🎧 Listen to This Article
Overview: Taiwan’s Latest Personal Income Tax Rules
TAIPEI – Taiwan’s updated individual income tax (IIT) framework for 2025 introduces key tax obligations for both residents and non-residents, impacting expatriates and local taxpayers alike. The system includes a progressive tax structure for residents and withholding tax obligations for non-residents, alongside the additional Income Basic Tax (IBT) for high earners.
Taiwan’s 2025 Individual Income Tax (IIT) Rates
Non-Resident Taxation
- Less than 90 days in Taiwan: A flat 18% withholding tax (WHT) applies to salary income from a Taiwan-registered entity. However, remuneration from foreign entities remains tax-exempt.
- Between 90 and 183 days: Non-residents are taxed at a flat 18% on their Taiwan-source salary, irrespective of payment location.
Resident Taxation (Progressive Tax Rates for 2024 Filing)
| Taxable Income (TWD) | Tax Rate (%) | Less Progressive Difference (TWD) |
|---|---|---|
| 0 – 590,000 | 5 | 0 |
| 590,001 – 1,330,000 | 12 | 41,300 |
| 1,330,001 – 2,660,000 | 20 | 147,700 |
| 2,660,001 – 4,980,000 | 30 | 413,700 |
| Over 4,980,000 | 40 | 911,700 |
Taiwan’s Income Basic Tax (IBT) System
Taiwan enforces an Income Basic Tax (IBT), applicable to residents—including expatriates staying over 183 days annually—at a flat rate of 20%.
Who is Affected?
- Individuals classified as Taiwan tax residents.
- Those earning TWD 1M+ in foreign-sourced income and TWD 7.5M+ in total basic income.
How IBT is Calculated:
- Income subject to IBT = Regular taxable income + Add-back items
- IBT Due = (Income subject to IBT – TWD 7.5M) × 20%
Add-back items include:
- Qualified insurance benefits
- Gains from beneficiary certificates of private investment funds
- Non-cash charitable donations
- Foreign-sourced income exceeding TWD 1M
Tax Credit Alert: Foreign tax payments on overseas income can be credited against IBT liabilities, subject to limitations.
Future Outlook & Compliance Tips
With Taiwan’s stringent tax framework, taxpayers—especially expatriates and high earners—must proactively assess their tax liabilities. Businesses should also ensure compliance with withholding tax obligations for foreign employees.
For further details, clarification, contributions, or any concerns regarding this article, please contact us at [email protected]. We value your feedback and are committed to providing accurate and timely information. Please note that our privacy policy will handle all inquiries
