Qualified Foreign Special Professionals can enjoy a tax incentive for a period of 5 years starting from the tax year in which they are first approved to work in Taiwan, provided their salary income exceeds NT$3 million and they reside in Taiwan for at least 183 days. During this period, half of the portion of their salary exceeding NT$3 million is excluded from their total gross income for tax purposes. Please note: This incentive is not automatically applied; you must "file on time" and "attach documentation to apply," otherwise you will lose these rights.

1. Legal Basis

• Article 22 of the Act for the Recruitment and Employment of Foreign Professionals: Specifies the basic framework for tax incentives (formerly Article 9; a 2021 amendment extended the applicable period from 3 years to 5 years).
• Regulations for the Reduction and Exemption of Income Tax for Foreign Special Professionals: Prescribes specific application procedures, required documents, and criteria for determining "first-time" status and "residency".

2. Three Mandatory Eligibility Conditions (Must be met simultaneously)

• Residency Status: Approved to reside in the R.O.C. for work for the "first time".
• Professional Field: Engaged in professional work recognized as requiring special expertise (covering fields such as technology, economy, education, culture, art, sports, finance, law, architectural design, national defense, etc.).
• Tax Background: Within the 5 years prior to the date of employment in professional work (or the date of obtaining an Employment Gold Card), the individual must not have had a registered household in Taiwan and must not have been a "resident" as defined by the Income Tax Act (i.e., did not stay in Taiwan for 183 days or more in any of the preceding 5 years).

3. Tax Incentive Content

• Salary Income Incentive: For annual salary income exceeding NT$3 million, 50% of the excess portion is tax-free.
• Overseas Income Incentive: For those who qualify, overseas income as defined in Article 12, Paragraph 1, Subparagraph 1 of the Income Basic Tax Act is excluded from the calculation of the individual basic income tax.

4. Key Filing Deadline (Special Reminder for 2026)

• As shown in your case, tax incentives must be declared and applied for within the statutory filing period for each year (usually May 1 to May 31).
• Consequences of Late Filing: If you fail to file within the deadline, even if you meet the professional criteria, you cannot apply the incentive for that year and must pay tax on your full salary.

Recommendations and Subsequent Notes

For Foreign Professionals / Gold Card Holders:

• Confirm Validity of Gold Card/Work Permit: After receiving an Employment Gold Card or a specific professional work permit, immediately confirm the starting point for the 183-day residency requirement.
• Annual Settlement Filing: Even if your employer has already withheld taxes, you must still personally or via an authorized representative perform a "settlement filing" in May and fill out the dedicated application form.

For Employers / HR:

• Onboarding Guidance: Foreign professionals are often unfamiliar with Taiwan's tax laws; HR should proactively remind them of this tax incentive and its "non-automatic" nature during onboarding.
• Salary Reporting Category: Correctly report the employee's income category and retain copies of relevant employment permits for reference.