Global Watch - Taiwan - Rulings issued on tax incentives for foreign professionals 

Background
  
In order to maintain the marketability of Taiwan's economy and to attract more foreigners to work in Taiwan, the Ministry of Finance ("MOF") issued a ruling in relation to tax incentives available for foreign professionals which became effective on 1 January 2008.  The rulings are in response to the tax incentives announced by Taiwan's Executive Yuan last year.
  
Employee's requirement
   
According to the new rulings, a foreign professional working for a Taiwan employer (which includes enterprises, organizations, institutions and schools), who is engaged in providing certain specialized or technical jobs, is able to claim tax deductions on non-salary payments.  For example, roundtrip airfares, home leave, children's scholarship, moving expenses, housing rental & repair cost, utilities, telephone bills and cleaning expenses, and other such non-salary payments will not be taxable to the foreign professional.  Please note that these non-salary payments must be made under the provisions of the foreign professionals' employment contract.
       
In addition, these foreign professionals have to stay in Taiwan for 183 days or more in a calendar year and have a monthly salary of at least NT$100,000 in order to qualify for such incentives.
   
Employer's obligation
  
For corporate tax purposes, employers are required to complete a standard form issued by the Taiwan tax authority detailing the non-salary payments made to their foreign professionals.  The form has to be submitted together with the employer's tax return, if any, to the Taiwan tax authority.  In addition, the employer is required to maintain records of the non-salary payments and keep original copies of the receipts/invoices as evidence of payments for the Taiwan tax authority's assessment.