Taxation on Remote Work – 啓源會計師事務所有限公司 Kaizen CPA Firm.

William holds both Australian and Taiwanese passports. Although he has been residing in Australia for an extended period, he still has household registration in Taiwan. He is employed by an Australian company as an engineer and has been declaring and paying personal income tax in Australia (Note 1). In recent years, due to his elderly father’s illness, he intends to discuss with his Australian employer that possibility to returning to Taiwan to take care of his father while working remotely (WFH, Work from Home). He plans to live in his father’s home in Taiwan for more than 183 days in 2025, with his salary continuing to be paid by the Australian company to his bank account in Australia. However, William realizes that when it comes time to file his taxes in Taiwan for 2025, he is unsure whether he needs to report the income from the overseas company. Should this income be declared as foreign income, or should it be considered as income sourced from within Taiwan?

How should an individual’s salary be taxed if they work remotely in Taiwan? The first step is to clarify whether the individual still has household registration in Taiwan. If they do, the next step is to determine if they have resided in Taiwan for more than 31 days and whether their economic center of gravity remains in Taiwan. The criteria for determining the economic center of gravity include: (1) whether the individual’s spouse and minor children still live in Taiwan, (2) whether the individual continues to enjoy social welfare benefits such as National Health Insurance, Labor Insurance, National Pension Insurance, or Farmer’s Health Insurance, and (3) whether the individual has established a company in Taiwan or holds positions as a director, supervisor, or manager in any company, among other factors for comprehensive evaluation.

If an individual still holds household registration in Taiwan but resides in Taiwan for no more than 30 days (inclusive) and their economic center of gravity is not in Taiwan, they are not considered tax resident of Taiwan. Consequently, salary income received from a foreign employer does not need to be declared or taxed in Taiwan.

However, if the individual still has Taiwanese household registration and has lived in Taiwan for more than 31 days (including 31 days), then the issue of whether the economic center is in Taiwan is no longer relevant. At this point, the individual is considered a Taiwan tax resident. When the tax season arrives, salary income from an overseas employer should be included as “income from within Taiwan” and reported based on the proportion of days spent in Taiwan during the year, for personal income tax filing.

Hence, does William need to file taxes in Taiwan for the year 2025? The answer is yes.

Since William has household registration in Taiwan and will exceed 31 days of residence in Taiwan for work, the salary paid by his Australian employer must be classified as income sourced from within Taiwan. When filing taxes in May of the following year, William will need to report this income based on the proportion of the days he resided in Taiwan during the year (Note 2).

Additionally, William’s Japanese colleague, Daiki, has heard about William’s plan to work remotely from Taiwan and is also considering joining him for a “workcation” (work and vacation) in Taiwan. In this case, does Daiki need to declare the salary paid by the Australian company for personal income tax in Taiwan?

Firstly, Daiki, being a foreign national holding a Japanese passport, must determine whether he is required to file taxes on his labor income based on his length of stay in Taiwan. If he provides services in Taiwan and his stay does not exceed 90 days (inclusive), he is exempt from Taiwanese tax obligations (tax-free). On the other hand, if Daiki stays in Taiwan for more than 91 days (inclusive) but no more than 182 days (inclusive), he will need to report the salary paid by the Australian company either in May of the following year or upon departure. Since Daiki originally plans to stay in Taiwan for no more than 30 days, he does not need to declare the salary paid by the Australian company for tax purposes in Taiwan.

Additionally, if Daiki has a freelance contract with a Taiwanese company, the situation changes. Regardless of whether Daiki is residing in Taiwan at the time or the number of days he stays, any income he receives from the Taiwan company for freelance work is considered as sourced income from Taiwan. In this case, the Taiwan company is responsible for withholding 18% of the payment as tax on Daiki’s behalf.

In summary, we will now organize the information in the following table:

Nationality	Taiwan Tax Resident				Taxation
Nationality	(1) Household Registration	(2) Period of Stays	(3) Main Source of Income from Taiwan (Note 3)	Status	Taxation
Taiwan	Yes	> 1 day	N/A	Taiwan Tax Resident	1. Paid by Taiwan company: settlement declaration required in May 2. Paid by an overseas company + the place of labor provision is in Taiwan: a settlement declaration is required in May (salaries paid by overseas employers are not overseas income but income in Taiwan and shall be incorporated into the declaration) 3. Consider the minimum tax (overseas income) (Note 2)
Nationality	Taiwan Tax Resident				Taxation
Nationality	(1) Household Registration	(2) Period of Stays	(3) Main Source of Income from Taiwan (Note 3)	Status	Taxation
Dual Nationality (Overseas Chinese)	Yes	1 ~ 30 days (including the 30^th days)	No	Non-Taiwan Tax Resident	1. Paid by Taiwan company: Withheld at a withholding rate of 18% 2. Paid by an overseas company + the place of labor provision is in Taiwan: tax-free
	Yes	1 ~ 30 days (including the 30^th days)	Yes	Taiwan Tax Resident	1. Paid by Taiwan company: settlement declaration required in May 2. Paid by an overseas company + the place of labor provision is in Taiwan: a settlement declaration is required in May (salaries paid by overseas employers are not overseas income but income in Taiwan and shall be incorporated into the declaration) 3. Consider the minimum tax (overseas income) (Note 2)
	Yes	> =31 days (including the 31^st days)	N/A	Taiwan Tax Resident	1. Paid by Taiwan company: settlement declaration required in May 2. Paid by an overseas company + the place of labor provision is in Taiwan: a settlement declaration is required in May (salaries paid by overseas employers are not overseas income but income in Taiwan and shall be incorporated into the declaration) 3. Consider the minimum tax (overseas income) (Note 2)
	No	< 90 days (including 90^th days)	N/A	Non-Taiwan Tax Resident	1. Paid by Taiwan company: Withheld at a withholding rate of 18% 2. Paid by an overseas company + the place of labor provision is in Taiwan: tax-free
	No	91 days (including 91^st days) ~ 182 days (including 182^nd days)	N/A	Non-Taiwan Tax Resident	1. Paid by Taiwan company: Withheld at a withholding rate of 18% 2. Paid by an overseas company + the place of labor provision is within the country: self-declaration is required in May or when leaving the country
	No	> = 183 days (including 183^rd days)	N/A	Taiwan Tax Resident	1. Paid by Taiwan company: settlement declaration required in May 2. Paid by an overseas company + the place of labor provision is in Taiwan: a settlement declaration is required in May (salaries paid by overseas employers are not overseas income but income in Taiwan and are included in the total income in proportion to the number of days of entry throughout the year. If the stay in the year is >300 days, 100% will not be included in the calculation. Proportionately based on the number of days) 3. Consider the minimum tax (overseas income) (Note 2)
Foreign National	No	< 90 days (including 90^th days)	N/A	Non-Taiwan Tax Resident	1. Paid by Taiwan company: Withheld at a withholding rate of 18% 2. Paid by an overseas company + the place of labor provision is in Taiwan: tax-free
	No	91days (including 91^st days) ~ 182 days (including 182^nd days)	N/A	Non-Taiwan Tax Resident	1. Paid by Taiwan company: Withheld at a withholding rate of 18% 2. Paid by an overseas company + the place of labor provision is in Taiwan: self-declaration required in May or when leaving Taiwan
	No	> = 183days (including 183^rd days)	N/A	Taiwan Tax Resident	1. Paid by Taiwan company: settlement declaration required in May 2. Paid by an overseas company + the place of labor provision is in Taiwan: a settlement declaration is required in May (salaries paid by overseas employers are not overseas income but income in Taiwan and are included in the total income in proportion to the number of days of entry throughout the year. If the stay in the year is >300 days, 100% will not be included in the calculation. Proportionately based on the number of days) 3. Consider the minimum tax (overseas income) (Note 2)

Note 1: If an individual has been filing personal income taxes in Australia for an extended period, they are considered a tax resident of Australia. In such cases, they may consider applying for a tax treaty to avoid double taxation between Taiwan and Australia.

Note 2: This case only discusses ‘salary income’. If the individual qualifies as a tax resident of Taiwan, they are required to include foreign income (including foreign rental income, foreign dividends, foreign capital gains, foreign interest income, etc.) in their total taxable income and report it under the Alternative Minimum Tax (AMT) system.

(1) Which foreign income should be included in the total taxable income under the Alternative Minimum Tax (AMT)?

An individual must meet the following two conditions for their foreign income to be fully included in the total taxable income:

(1) The individual is a resident of Taiwan.

(2) The individual’s total foreign income for the year exceeds TWD 1,000,000.

(2) What is meant by a resident of Taiwan?

An individual is considered a resident of Taiwan if they meet one of the following conditions:

(1) They have a domicile in Taiwan and regularly reside in Taiwan.

(2) They do not have a domicile in Taiwan but stay in Taiwan for a total of 183 days or more in a given tax year.

Note 3: “Economic center in Taiwan” refers to the consideration of factors such as the individual’s family and social connections, political culture, participation in other activities, profession, business location, and property management location. The following principles should be used for comprehensive determination:

(1) The individual is entitled to social welfare benefits such as National Health Insurance, Labor Insurance, National Pension Insurance, or Farmers’ Health Insurance.

(2) The individual’s spouse or minor children reside in Taiwan.

(3) The individual is engaged in business operations, performing duties, managing property, providing labor services, or serving as a director, supervisor, or manager in Taiwan.

(4) Other aspects of the individual’s life and economic interests that sufficiently support the conclusion that their life and economic center is in Taiwan.