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Taiwan Clarifies Tax Rules For Japanese Expats

by Mary Swire, Tax-News.com, Hong Kong

09 October 2017


The National Taxation Bureau of Taipei has released new guidelines on the tax treatment of Japanese expatriates working short-term in Taiwan under their bilateral tax treaty.

The "Agreement between the Interchange Association [Japan] and the Association of East Asian Relations [Taiwan] for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income" was signed on November 26, 2015, and came into force on June 13, 2016.

Following Japanese tax reforms in 2016, the "Mutual Exemption Law for Income of Foreign Nationals Related to International Transportation Business" was changed to the "Mutual Exemption Law for Income of Foreign Residents," which came into force on January 1, 2017.

NTBT released new guidelines on September 25 in response to many inquiries received from Japanese expats on how to apply the new treaty.

The guidelines clarify that in order to benefit from the treaty's provisions, a number of conditions must be met:

  • The recipient must be resident in Taiwan for no more than 183 aggregate days per twelve months;
  • The recipient must be paid by an employer who is not a resident of Taiwan; and
  • The remuneration is not paid through a permanent establishment or fixed base owned by the employer in Taiwan.

To apply for the avoidance of double taxation under Article 16 of the Regulations Governing Application of Agreements for the Avoidance of Double Taxation with Respect to Taxes on Income, taxpayers must submit their Resident Certificate issued by the Japanese tax authorities, along with their passport, employment contract, tax certificate, declaration of work contents, identity documents, and details on the amount of the payment.

TAGS: expatriates | tax | Taiwan | tax reform | Japan | Regulations | Tax

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