In recent years, driven by the global AI investment boom, many individuals have engaged in cross-border investments or entrusted institutions to invest in offshore assets in order to generate profits. In the past, aggregated offshore income of a household (i.e., income not sourced from the Republic of China, Hong Kong, or Macao) below NTD 1,000,000 was not required to be reported. However, if investment gains have significantly increased in 2025, taxpayers are advised to verify the relevant information with the entrusted institutions and file income tax returns in accordance with the law.

The National Taxation Bureau of Kaohsiung of the Ministry of Finance (hereinafter referred to as “the Bureau”) stated that, when filing individual income tax returns, if a household’s aggregated offshore income reaches NTD 1,000,000, the full amount shall be included in the basic income. It shall be combined with the sum of other items of income prescribed in Paragraph 1, Article 12 of the Income Basic Tax Act (i.e., basic income = the sum of the net taxable income + offshore income + specified insurance benefits + income from transactions in unlisted or OTC-unquoted shares, etc.) and, after deducting the exemption amount of NTD 7,500,000 (applicable for both 2024 and 2025), the basic tax shall be calculated and reported in accordance with Article 14 of the enforcement rules of the same Act. Therefore, the NTD 7,500,000 exemption is a deduction from the total basic income. However, some taxpayers failed to file tax returns because they mistakenly believed that offshore income below NTD 7,500,000 need not be included in reporting, and because their investment income in previous years did not reach the filing threshold. In years when investment income increases significantly, they may inadvertently underreport income due to negligence, resulting in tax underpayment. Such violations occur frequently, and taxpayers are advised to pay special attention to this matter.

The Bureau further stated that offshore income shall be included in the basic income in the year of receipt. Once income has been realized, it shall be reported in accordance with the law regardless of whether it is remitted back to Taiwan. Taking stock investments as an example, the relevant income shall be recognized in the year of the “settlement date.” For income derived from transactions in fund beneficiary certificates, the relevant year shall be determined based on the “date stipulated in the contract for calculating the redemption price.”

As for the conversion of offshore funds, “conversion” refers to the redemption of the original fund, followed by reinvestment of the redeemed proceeds into a new fund. Therefore, the gain or loss on the original fund shall be calculated and reported for tax purposes in the year in which the fund conversion takes place.

The Bureau reminds taxpayers that offshore income is not included in the scope of income information available for verification by tax authorities at the time of filing annual tax returns. Taxpayers are advised to obtain income details from their entrusted institutions on a yearly basis and file their basic income in accordance with the law. Where relevant notification details have been marked as “offshore income,” costs and necessary expenses may not be deducted again using the standard expense rate, so as to avoid penalties. If any failure to file tax returns in accordance with the law is discovered, taxpayers should promptly make voluntary supplementary filings and pay the outstanding tax together with interest to the relevant branch offices or tax offices before any whistleblowing or investigation by the tax authorities. In such cases, the relevant penalty waiver provisions may apply. If you have any questions, please call our toll-free service hotline at 0800-000-321 for assistance, or visit the Bureau’s website (https://www.ntbk.gov.tw) to make an online inquiry using the National Tax Administration’s smart customer service tool, “National Tax Assistant.”

Provided by: Legal Affairs Division

Contact person: Section Chief Hsu Yi-yun       Telephone: (07)7256600 Ext.7550

Written by: Wang Cheng-chu                           Telephone: (07)7256600 Ext. 7562