By Cheli Liaw and Connie Chiou To be competitive in the international market, the Taiwan Ministry of Finance (MOF) issued two rulings in January 2008 to lower the tax burden of foreign professionals working in Taiwan. The rulings will benefit both employees and employers. According to the rulings, certain expenses incurred by an employer for a foreign professional will not be taxable to the employee but will be deductible for the employer. Affected expenditure includes round-trip passage for the expatriate and his/her dependents, travel expenses for home leave, relocation fees, utilities, house cleaning costs, telephone bills, rentals, repair and maintenance expenses and education expenses, which are set forth in the employment contract. To qualify for the benefits of the new rulings, a foreign professional must meet the following criteria:
The foreign professional must be non-Taiwanese - an employee who is also a Taiwan citizen does not qualify.The employer must obtain a work permit from the Council of Labor Affairs (COLA) of the Executive Yuan.The foreign professional must stay in Taiwan for at least 183 days in a calendar year.The taxable salary of the foreign professional must exceed NTD 100,000 per month, although the MOF may waive the salary threshold in certain cases.The individual must work in one of the following areas: construction and architectural services; tax and financial services; manufacturing; logistics services; transportation; real estate agencies; immigration services; lawyer’s services; technician’s services; medical care; veterinary services; environmental protection; culture, sport and tourism services; academic research; chef’s services; administrator, designer, planner or consultant for scientific or technical services; and other specific employment approved by COLA and the central authorities; or the individual is the manager of a business that has been approved by overseas Chinese or foreigners. For additional alerts, visit the Global Tax Alerts archive. |
