The National Taxation Bureau of Taipei, Ministry of Finance states that to enhance Taiwan's competitiveness in the global talent market and continue attracting foreign specialist professionals to contribute to Taiwan's development, Article 20 of the Act for the Recruitment and Employment of Foreign Professionals stipulates that if foreign specialist professionals required by various fields in Taiwan, as announced by the central competent authorities (hereinafter referred to as “foreign specialist professionals”), meet certain conditions and are approved to come to work in Taiwan for the first time, then for five years counting from the tax year in which they first meet the conditions of residing in Taiwan for 183 full days of the year and having a salary income of more than 3 million NT dollars, half of the part of their salary income above 3 million NT dollars will be excluded from the assessment of individual income tax.

The Bureau explains that according to Article 3 of the Regulations Governing Reduction and Exemption of Income Tax of Foreign Specialist Professionals, foreign nationals who obtain the approved employment of a foreign specialist professional issued by the Ministry of Labor or Ministry of Education, or who holds an Employment Gold Card issued by the National Immigration Agency, may apply for tax incentives when filing their annual individual income tax returns if they meet the following three conditions: 1. He/she has for the first time been approved to reside in Taiwan for the purpose of work; 2. He/she has engaged in professional work related to recognized specific expertise in Taiwan; 3. During the five years prior to the date of his/her employment engaged in professional work, he/she had no household registration in Taiwan and was not an individual residing in Taiwan in accordance with the Income Tax Act.

The Bureau further explains that the most common mistake when applying for foreign specialist professionals’ tax incentives is the failure to fulfill the requirement of being “first time been approved to reside in Taiwan for the purpose of work.” This means foreign specialist professionals must obtain Employment Gold Cards or Foreign Special Professional Personnel Employment Work Permits based on their special expertise during their first time working in Taiwan. If they first apply for Foreign Professional Personnel Employment Work Permits and residence permits and only later seek Employment Gold Cards or Foreign Special Professional Personnel Employment Work Permits after having worked in Taiwan for some time, they will not meet this requirement.

The Bureau provides an example: In January 2023, Company A hired Mr. J to work in Taiwan with an annual salary of over NT$10 million. They obtained a Foreign Professional Personnel Employment Work Permit for him from the Ministry of Labor and a residence permit from the National Immigration Agency. In January 2024, Company A applied for a Foreign Special Professional Personnel Employment Work Permit for Mr. J. However, because he had already lived and worked in Taiwan in 2023, he doesn’t meet the requirement of “first-time approval to reside in Taiwan for the purpose of work” as a foreign specialist professional, and thus cannot apply for the associated tax incentives. If Company A had initially (or simultaneously) applied for a Foreign Special Professional Personnel Employment Work Permit or Employment Gold Card for Mr. J in January 2023 under the same employment contract for the same professional work, and if Mr. J subsequently resided in Taiwan for more than 183 days in 2024 while fulfilling the three specified conditions, only NT$9,000,000 of his total professional salary income of NT$15,218,000 for that year would be subject to taxation. This is calculated as follows: [Total salary income eligible for tax incentives is NT$15,000,000 (salary income NT$15,218,000 - special deduction for employment income NT$218,000) - salary income not included in total taxable income is NT$6,000,000 ((NT$15,000,000 - NT$3,000,000) × 50%)].

The Bureau encourages companies to gain a comprehensive understanding of the relevant conditions associated with tax incentives for the recruitment of foreign professionals. By doing so, companies can safeguard the tax benefit rights of these individuals and bolster Taiwan’s attractiveness to international talent. 

(Contact Person: Ms. Yang, Head of the Foreign Taxpayer Service Section, Individual Income, Estate, and Gift Tax Division; Tel: 2311-3711 ext. 1650)