According to the National Taxation Bureau of Taipei, Ministry of Finance, in order to attract foreign professionals to work in Taiwan, Article 20 of the Act for the Recruitment and Employment of Foreign Professionals stipulates that, within five years counting from the tax year in which they for the first time meet the conditions of residing in the R.O.C. for fully 183 days of the year and having salary income of more than NT$3 million, the part of their salary income above NT$3 million in each such tax year in which they reside in the R.O.C. for fully 183 days shall be halved in amount in the computation of total income for the assessment of individual income tax liability in that year.
The Bureau explains that, according to Article 3 of the Regulations Governing Reduction and Exemption of Income Tax of Foreign Special Professionals, in order to apply for the aforementioned tax incentives, the applicant shall obtain a permit document for the employment (work) of foreign special professionals issued by the competent authority or the Employment Gold Card issued by the National Immigration Agency of the Ministry of the Interior, and at the same time satisfy the following three requirements: (1) He/she has for the first time been approved to reside in the R.O.C. for the purpose of work; (2) He/she has engaged in professional work related to recognized special expertise in the R.O.C.; (3) During the five years prior to the date of his/her employment to engage in professional work or the date of obtaining the Employment Gold Card, he/she did not have household registration in the R.O.C. and was not an individual residing in the R.O.C. in accordance with the Income Tax Act. In addition, regarding the aforementioned "date of employment to engage in professional work" and "date of obtaining the Employment Gold Card", the former refers to the beginning date of the employment period as stated in the employment (work) permit letter for foreign professionals issued by the Ministry of Labor or the Ministry of Education, and the latter refers to the issuance date as stated in the Employment Gold Card.
The Bureau provides the following example. Company A, a local employer, and Person B, a Japanese national, signed the first employment contract in January 2019 and Person B worked for Company A during the employment period starting from February 1, 2019. Person B earned less than NT$3 million in 2019, and after the salary increase in 2020, earned more than NT$4 million in 2020 and 2021, and subsequently obtained an Employment Gold Card on January 10, 2022. When filing the individual income tax return for 2021, Person B applied for the tax incentives for foreign special professionals. However, since Person B has resided in the R.O.C. for more than 300 days in each of the three years prior to the issuance date of the Employment Gold Card (January 10, 2022), and is an individual residing in the R.O.C., the application for the tax incentives for foreign special professionals is not in compliance with the requirements.
Lastly, the Bureau reminds enterprises to familiarize themselves with the regulations on foreign special professionals as announced by the competent authorities when recruiting foreign professionals, and that foreign special professionals who are eligible for tax incentives shall file their individual income tax returns in the respective year, fill out the application form for income tax exemptions for foreign special professionals, and submit the application by attaching the relevant documents, so as to avoid affecting the possible rights and interests of the foreign professionals to receive the tax incentives.
(Contact Person: Lin, Chief of the Individual Income, Estate and Gift Tax Division; Tel: 2311-3711 ext. 1650)