US tax guide for Americans living in Taiwan (2025 - 2026)
US citizens living in Taiwan must file a US federal tax return on worldwide income – the US taxes citizens based on citizenship, not residency.
Taiwan income tax additionally applies to individuals who spend 183 or more days per year in Taiwan, at progressive rates of 5%–40% on Taiwan-sourced income for tax year 2025 (returns filed in 2026). This creates dual filing obligations for most American expats. For US expat tax return preparation, professional guidance is recommended.
This guide covers the following seven topics for US expats in Taiwan:
- Taiwan tax residency and the 183-day rule
- Taiwan income tax rates for the tax year 2025 and how they compare to the US
- Capital gains tax in Taiwan, including real estate (HLTI) and the LVIT ruling
- Standard deductions and personal exemptions for 2025
- Social security, labor insurance, and pension obligations
- The US–Taiwan tax relationship and H.R. 33 legislative update
- US filing requirements: FEIE, FBAR, and FATCA thresholds and deadlines
Tax residency in Taiwan
Taiwan tax residency is established when an individual spends 183 or more days in Taiwan within a calendar year, per Taiwan Income Tax Act Article 7. Residents pay progressive Taiwan income tax at 5%–40% on Taiwan-sourced income for the tax year 2025.
The following three criteria determine Taiwan tax residency status for foreign nationals:
- Physical presence (183+ days): An individual present in Taiwan for 183 or more days in a tax year is considered a tax resident and subject to progressive income tax rates.
- Non-resident withholding (91–182 days): Foreign nationals present for 91–182 days are treated as non-residents – salary income is generally withheld at 18%, with other income categories subject to 20% or other rates.
- Non-resident withholding (90 days or fewer): Foreign nationals present for 90 days or fewer are also treated as non-residents under the same withholding rules.
Taiwan income tax rates
Taiwan income tax for the tax year 2025 is levied on both residents and non-residents, with different rates for each group. Residents – individuals present in Taiwan for 183 or more days – pay progressive rates on Taiwan-sourced income. Non-residents pay a flat 18% withholding rate on salary income earned in Taiwan.
For tax year 2025, Taiwan applies five progressive brackets to resident individuals, from 5% on the first TWD 590,000 of taxable income to 40% on income above TWD 4,980,000.
Taiwan individual income tax brackets – tax year 2025 (return due June 1, 2026)
| Taxable income (TWD) | Tax rate (%) |
|---|---|
| 0–590,000 | 5 |
| 590,001–1,330,000 | 12 |
| 1,330,001–2,660,000 | 20 |
| 2,660,001–4,980,000 | 30 |
| Above 4,980,000 | 40 |
Source: Taiwan e-Tax Portal, PwC Taiwan Tax Summaries 2026.
Taiwan has already announced the 2026 figures applying to returns filed in May 2027:
- Income tax brackets increase to NT$610,000 / NT$1,380,000 / NT$2,770,000 / NT$5,190,000
- Personal exemption: NT$101,000 (NT$151,500 for age 70+)
- Standard deduction: NT$136,000 (single) / NT$272,000 (married filing jointly)
- Special salary deduction: NT$227,000
Taiwan Alternative Minimum Tax (IBT)
Taiwan's Alternative Minimum Tax (IBT) is a supplemental system ensuring a minimum level of taxation for high-income individuals who benefit from significant deductions and exemptions.
Taiwan's individual income basic tax is calculated on basic income: subtract NT$7,500,000 and apply 20%. If the basic tax amount is higher than the regular income tax, only the difference is payable.
Value Added Tax (VAT)
Taiwan's standard VAT rate is 5%, applying to all sales of goods and services within the country and to imports.
Other taxes
Taiwan does not impose a net wealth tax. Property tax applies annually to land (1%–5.5% of assessed value) and buildings (1.2%–5% depending on use). A luxury tax of 10% applies to selective goods, including high-end vehicles, yachts, and private jets.
To reduce double taxation on the same income, US expats in Taiwan may claim the Foreign Earned Income Exclusion (Form 2555) or the Foreign Tax Credit (Form 1116).
Standard deductions and personal exemptions in Taiwan (2025)
For tax year 2025, single Taiwan residents can deduct TWD 131,000 as a standard deduction plus TWD 97,000 personal exemption; married couples filing jointly deduct TWD 262,000 standard deduction plus TWD 97,000 per household member.
| Deduction/exemption | Tax year 2025 (TWD) |
|---|---|
| Personal exemption (per person) | 97,000 |
| Personal exemption (age 70+) | 145,500 |
| Standard deduction – single | 131,000 |
| Standard deduction – married filing jointly | 262,000 |
| Salary/wage special deduction | 218,000 |
Source: Taiwan e-Tax Portal – Exemption and Deduction Table
Taiwan has already announced the 2026 figures applying to returns filed in May 2027:
- Personal exemption: NT$101,000 (NT$151,500 for age 70+)
- Standard deduction: NT$136,000 (single) / NT$272,000 (married filing jointly)
- Special salary deduction: NT$227,000
Itemized deductions
Itemized deductions allow Taiwan residents to deduct qualifying expenses instead of taking the standard deduction. The following five categories of expenses qualify as itemized deductions:
- Donations and charitable contributions
- Eligible insurance premiums
- Medical and maternity expenses
- Calamity losses
- Owner-occupied home mortgage interest, up to NT$300,000
Rent is a separate special deduction of up to NT$180,000 if the taxpayer qualifies – it is not an itemized deduction.
Special deductions
Special deductions are available for specific situations. The following six categories commonly apply under current Taiwan tax rules:
- Savings and investment
- Disability
- Qualified educational tuition for eligible children
- Pre-school children
- Long-term care
- Housing rent (up to NT$180,000 if the taxpayer qualifies)
Personal exemptions
Each resident alien is entitled to a personal exemption of TWD 97,000. The same amount applies to a spouse and each dependent, rising to TWD 145,500 for dependents over the age of 70.
Non-resident aliens are not entitled to any personal exemptions.
Basic living expense difference
The basic living expense per person for the tax year 2025 is TWD 213,000, as announced by Taiwan's Ministry of Finance. The total household amount is calculated by multiplying TWD 213,000 by the number of persons in the household.
If this total exceeds the sum of personal exemptions, standard deductions, and applicable special deductions, the excess can be claimed as an additional deduction from consolidated gross income.
Capital gains tax in Taiwan
Taiwan does not tax capital gains on listed securities sold on the Taiwan Stock Exchange (TWSE) or Taipei Exchange (TPEx). However, Taiwan imposes the House and Land Transaction Income Tax (HLTI) on real estate gains at rates of 15%–45% depending on holding period and residency status.
Capital gains on listed securities (stocks and ETFs)
Taiwan exempts gains from selling shares listed on the TWSE or TPEx from Taiwan capital gains tax, regardless of the gain amount or holding period. This exemption does not eliminate US tax obligations.
A US citizen in Taiwan who sells US-listed ETFs owes US tax on the gain. Short-term gains (assets held one year or less) are taxed at ordinary income rates; long-term gains generally qualify for the 0%, 15%, or 20% capital gains rates depending on income. Taiwan does not impose a separate tax on those foreign stock gains.
For a full breakdown of how these gains are reported, see how capital gains are taxed for US expats.
A Taiwan resident selling US ETFs owes US capital gains tax on the gain – but Taiwan collects nothing on foreign stock sales. Because Taiwan levied no tax, there is no foreign tax credit available to offset the US liability on these gains.
Capital gains on real estate (HLTI)
The Taiwan capital gains tax on real estate is imposed under the House and Land Transaction Income Tax (HLTI). For US citizens without Taiwan residency, the flat rate is 45% on properties held under two years and 35% for properties held two years or more.
HLTI rates for resident individuals are graduated by holding period; non-residents are generally taxed at 45% (2 years or less) or 35% (more than 2 years), with a 10% self-use rate available if statutory conditions are met.
| Holding period | Resident rate | Non-resident rate |
|---|---|---|
| 2 years or less | 45% | 45% |
| More than 2 to 5 years | 35% | 35% |
| More than 5 to 10 years | 20% | – |
| More than 10 years | 15% | – |
| Self-use (conditions met) | 10% | 10% |
Source: National Taxation Bureau of Taipei: applicable tax rates
A US citizen selling Taiwan property must also report the gain on Form 1040 Schedule D. The HLTI income-based portion may be creditable on Form 1116, subject to the FTC limitation – see capital gains tax on foreign property: 2026 guide and Section 121 primary residence exclusion for expats.
Land Value Increment Tax (LVIT) and US Foreign Tax Credit
Taiwan's Land Value Increment Tax (LVIT) is a separate tax on the increase in assessed land value at the time of a real estate sale. The IRS has ruled that LVIT does not qualify as a creditable foreign income tax for US Foreign Tax Credit purposes.
IRS Chief Counsel Advice ILM 202317020 determined that LVIT is imposed on land value appreciation rather than on net income, and therefore does not satisfy the net income requirement under IRC § 901.
US citizens cannot claim the FTC for LVIT paid when selling Taiwan property. The rules on which foreign taxes qualify as creditable are covered in detail in IRS Publication 514.
Gift tax in Taiwan
Taiwan's gift tax annual exemption is TWD 2,440,000 per donor for tax year 2025, per the Taiwan Ministry of Finance – Gift Tax Act. The net gift amount above this threshold is subject to progressive rates.
US citizens in Taiwan who make gifts exceeding $19,000 per recipient in 2025 may also need to file IRS Form 709, regardless of Taiwan gift tax obligations.
Net taxable gifts up to NT$28,110,000 are taxed at 10%, gifts above NT$28,110,000 up to NT$56,210,000 are taxed at 15%, and amounts above NT$56,210,000 are taxed at 20%.
| Gift subject to tax (TWD) | Tax rate (%) |
|---|---|
| 0–28,110,000 | 10 |
| 28,110,001–56,210,000 | 15 |
| Above 56,210,000 | 20 |
Estate tax in Taiwan
Taiwan estate tax is progressive – 10%, 15%, and 20% – with a 2025 exemption of NT$13,330,000. Taiwan domiciliaries are taxed on worldwide assets; non-domiciliaries on Taiwan-sited assets only.
The United States and Taiwan do not have a bilateral estate tax treaty as of April 2026. US citizens with assets in both jurisdictions face potential double estate taxation with no treaty relief.
The tax rates are progressive based on the value of the taxable estate:
| Taxable estate (TWD) | Tax rate (%) |
|---|---|
| 0–56,210,000 | 10 |
| 56,210,001–112,420,000 | 15 |
| Above 112,420,000 | 20 |
Social Security in Taiwan
Many foreign workers in Taiwan participate in NHI and Labor Insurance, and eligible employers must contribute at least 6% to labor pension accounts. The exact coverage depends on the worker's status and employer category.
National Health Insurance (NHI) covers foreign nationals who have a resident certificate and have completed six full months of stay, unless they qualify earlier through employment-based coverage. The standard NHI premium rate is 5.17%, split between the employee, employer, and government.
Labor Insurance covers most employed workers in Taiwan, including foreign nationals. The total premium rate is 12%, split between the employee (20%), employer (70%), and government (10%).
The Labor Pension program requires employers to contribute 6% of an employee's monthly salary to an individual pension account. Foreign nationals who leave Taiwan can withdraw their accumulated balance upon departure.
No totalization agreement exists between the United States and Taiwan. A self-employed US citizen in Taiwan may owe US self-employment tax, but Taiwan Labor Insurance coverage depends on the worker's status and is not automatic for every freelancer or contractor.
US–Taiwan tax relationship and pending legislation
The United States and Taiwan do not currently have an income tax treaty. Congress is considering legislation that would authorize a tax agreement with Taiwan, leaving US expats without treaty-based relief from double taxation in the meantime.
Without a US–Taiwan tax treaty, there is no treaty-based reduction of withholding rates on dividends, interest, or pensions – unlike the relief available to US expats in countries such as the UK or Germany. US expats instead rely on the Foreign Tax Credit or the Foreign Earned Income Exclusion to reduce or eliminate double taxation.
Pending US legislation (H.R. 33)
The US House of Representatives passed H.R. 33 (United States–Taiwan Expedited Double-Tax Relief Act) on January 15, 2025, with a 423–1 vote. The bill authorizes the President to negotiate a tax agreement with Taiwan, providing treaty-like relief on wages, dividends, interest, and pensions.
H.R. 33 was received in the Senate on January 16, 2025, and a Senate companion bill was introduced on January 23, 2025. As of April 2026, the bill has not been enacted into law. Additional coverage is available from RSM and KPMG.
Until H.R. 33 is enacted, US expats in Taiwan rely on the Foreign Earned Income Exclusion (Form 2555) or the Foreign Tax Credit (Form 1116) to reduce or eliminate double taxation.
Filing a US tax return from Taiwan (FBAR, FEIE, FATCA)
US citizens in Taiwan must file Form 1040 when their worldwide gross income meets the filing threshold.
Three additional reporting requirements apply to most expats: the Foreign Earned Income Exclusion (Form 2555, up to $130,000 for tax year 2025), the FBAR (FinCEN Form 114, required if foreign accounts exceeded $10,000 in aggregate at any point during the year), and FATCA (Form 8938, required if foreign assets exceeded $200,000 for single filers or $400,000 for married filers at year-end).
Full guidance is available in IRS Publication 54.
The following five US filing requirements most commonly apply to Americans living in Taiwan:
- Form 1040 – the base US federal tax return, reporting worldwide income. US expats receive an automatic 2-month extension to June 15, with a further extension to October 15 available via Form 4868.
- Foreign Earned Income Exclusion (Form 2555) – excludes up to $130,000 of qualifying earned income for tax year 2025 from US federal tax. Requires either the Physical Presence Test (330 days) or the Bona Fide Residence Test.
- Foreign Tax Credit (Form 1116) – offsets US tax dollar-for-dollar with Taiwan income taxes already paid on the same income. Most useful for income above the FEIE limit or for passive income such as dividends and interest.
- FBAR (FinCEN Form 114) – required if Taiwan bank account balances exceeded $10,000 in aggregate at any point during the year. Deadline is April 15, with an automatic extension to October 15. Non-willful violations carry civil penalties of up to $10,000 per violation (adjusted for inflation); willful violations may result in significantly higher penalties. Filed through the FinCEN BSA E-Filing System – not with the IRS.
- Form 8938 (FATCA) – required if specified foreign financial assets exceeded $200,000 (single) or $400,000 (married filing jointly) at year-end, or $300,000 / $600,000 at any point during the year for taxpayers living abroad.
A US expat in Taiwan with a single bank account that exceeded $10,000 at any point in 2025 must file FBAR by April 15, 2026 (auto-extended to October 15). Missing this deadline can lead to civil penalties of up to $10,000 per violation (adjusted for inflation), with higher penalties possible for willful violations.
Taiwan tax filing deadlines
Taiwan individual income tax returns for 2025 income must be filed and any tax due paid by June 1, 2026. Taiwan does not grant automatic extensions – late filing triggers penalties and interest on unpaid tax.
The following four penalties apply for late or incorrect submissions:
- Late filing penalties: the amount depends on how late the return is filed and the tax due.
- Interest on unpaid tax: charged from the day after the due date until the date of payment, at a rate set by the tax authorities.
- Penalties for under-declaring income: typically a percentage of the under-reported amount, and substantial in cases of deliberate evasion.
- Additional scrutiny or audits: incorrect filings can trigger a detailed examination of financial affairs and possibly additional penalties.
Conclusion
US citizens living in Taiwan face dual filing obligations for the tax year 2025: a US federal return on worldwide income and a Taiwan income tax return if they spend 183 or more days in the country. The absence of a US–Taiwan tax treaty means there is no treaty-based relief – most expats rely on the Foreign Earned Income Exclusion or the Foreign Tax Credit to avoid double taxation.
Taiwan's 2025 income tax brackets, standard deductions, and personal exemptions have all been updated from prior years – verify figures against the Taiwan e-Tax Portal before filing.
FAQ
US citizens in Taiwan owe US federal income tax on worldwide income under citizenship-based taxation. Taiwan taxes for foreigners who spend 183 or more days per year additionally apply to Taiwan-sourced income. Americans in Taiwan use the FEIE – $130,000 for tax year 2025 – via Form 2555 or the Foreign Tax Credit (Form 1116) to avoid paying tax twice on the same income.
Taiwan residents (183+ days per year) pay progressive Taiwan income tax at 5%–40% on Taiwan-sourced income. The 2025 tax year brackets range from 5% on taxable income up to TWD 590,000 to 40% on income above TWD 4,980,000. For non-residents, salary income is generally withheld at 18% regardless of length of stay; other Taiwan-sourced income categories may be subject to 20% or other withholding rates.
Taiwan capital gains tax on US stocks does not apply – Taiwan imposes no tax on gains from selling US-listed securities such as ETFs or individual stocks. However, US citizens owe US capital gains tax on those same gains and must report them on Schedule D of Form 1040. No Foreign Tax Credit is available because Taiwan collected no tax.
No. The IRS ruled in Chief Counsel Advice ILM 202317020 that LVIT is not creditable for the US Foreign Tax Credit – it does not qualify as a foreign income tax under IRC § 901 because LVIT is imposed on land value increments rather than on net income. US citizens cannot claim the Foreign Tax Credit for LVIT paid when selling Taiwan property. Taiwan's income-based HLTI portion may be creditable, subject to Form 1116 limitations.
No formal US–Taiwan tax treaty exists as of April 2026. The US House of Representatives passed H.R. 33 (United States–Taiwan Expedited Double-Tax Relief Act) with a 423–1 vote on January 15, 2025, but the Senate has not yet enacted the bill. US expats currently rely on the FEIE ($130,000 for 2025) or the Foreign Tax Credit to prevent double taxation.
Taiwan's gift tax annual exemption is TWD 2,440,000 per donor for tax year 2025. Net taxable gifts up to NT$28,110,000 are taxed at 10%, gifts above NT$28,110,000 up to NT$56,210,000 at 15%, and amounts above NT$56,210,000 at 20%. US citizens in Taiwan who give gifts exceeding $19,000 per recipient in 2025 may also need to file IRS Form 709, regardless of Taiwan gift tax obligations.
Yes. US citizens whose Taiwan bank account balances had an aggregate value exceeding $10,000 at any point during the calendar year must file FinCEN Form 114 (FBAR) by April 15, with an automatic extension to October 15. Non-willful violations carry civil penalties of up to $10,000 per violation (adjusted for inflation); willful violations may result in significantly higher penalties.
Taiwan income tax returns for 2025 income must be filed and any tax due paid by June 1, 2026. Taiwan does not grant automatic extensions – late filing triggers penalties and interest on unpaid tax. US expats also face a separate US filing deadline of April 15, 2026, with an automatic 2-month extension to June 15 for Americans residing abroad.
