Act for the Recruitment and Employment of Foreign Professionals
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1 Taiwan Tax Update Noember 2017 Act for the Recruitment and Employment of Foreign s On October 31, 2017, the Legislatie Yuan has passed the Act for the Recruitment and Employment of Foreign s (referred to as the Act ), with the hope to attract and recruit foreign talent to work in Taiwan. The Act has broadened the proisions relating to foreign workers isa, residence, insurance, tax, retirement and other benefits in Taiwan. Based on the Act, foreign workers are classified into the following three categories based on the leel of professional qualification: i) Foreign s: foreign national engaging in professional work in Taiwan ii) Foreign Special s: foreign professional who possesses special expertise needed by Taiwan in science & technology, economy, education, culture, arts, sports and other fields, as announced by the releant competent authority iii) Foreign Senior s: those that possess high-leel expertise and skills needed by Taiwan. He/she should hae distinctie talent in scientific and technological R&D or managerial work at a special technology or scientific and technological institute, or possesses special abilities that enable them to make exceptional contributions to Taiwan s economy, industry, education or welfare, or hae won top awards at prestigious international competitions. The following paragraphs list out the benefits and legislations applicable to each category of the foreign nationals. Foreign s Indiiduals who require a longer time to seek for employment may apply for employment seeker isitor isa (multiple entries and with duration of 6 months). The foreign professional s spouse and children under 20 years old or PwC Taiwan 1
2 children oer 20 years old that is unable to take care of himself/herself due to physical or mental disability, can enroll into Taiwan National Health Insurance Program upon obtaining Alien Resident Certificate ( ARC ), without the need to fulfil the 6 months restriction as stated in Paragraph 1, Article 9 of the National Health Insurance Act. Foreign professional who obtains a alid Alien Permanent Resident Certificate (APRC) may: i. Enroll in Taiwan New Pension scheme ii. Loosen the restriction on the number of days the foreign national needs to stay in Taiwan to maintain his/her APRC status. Howeer, if the foreign professional has left Taiwan and does not enter into Taiwan within 5 years, the APRC will be cancelled iii. Apply APRC for spouse, children under 20 years old or children oer 20 years old that is unable to take care of himself/herself due to physical or mental disability, upon fulfilling certain criteria i. Allow children that are oer 20 years old to apply for Taiwan personal work permit, upon fulfilling certain criteria Foreign Special s Work permit is extended from 3 years to 5 years Foreign special professionals are eligible to apply for 4-in-1 Employment Gold Card. The Card combines work permit, resident isa, Alien Resident Certificate and re-entry permit. This Card proides a certain period of open personal work permit, which enhances the flexibility for job change, take on part time jobs, or act as a technical adiser, lecturer, etc. The Card will be alid for a maximum of 3 years, and re-application is required upon reassessment. Lineal ascendant may apply for family isitor isa, which allows the lineal ascendant to stay for up to one year. Foreign special professionals whose annual income exceeds 3 million New Taiwan Dollars may benefit from the tax preferential treatment. Within 3 years starting from the tax year in which the indiidual for the first time stays in Taiwan for 183 days or more, half of the indiidual s salary income exceeding 3 million New Taiwan Dollars will not be taxed in Taiwan. The benefit may be deferred for up to 5 years. Please note that this is not applicable to foreigners who is currently a resident of Taiwan. In addition, Taiwanese citizens with dual nationalities who does not hae Taiwan PwC Taiwan 2
3 household registration and requires a work permit to work in Taiwan should not be excluded from the tax preferential treatment. Foreign Senior s Spouse, children under 20 years old or children oer 20 years old that is unable to take care of himself/herself due to physical or mental disability may apply for permanent residency together with the foreign senior professional. COMPARISON GRID IN ONE GLANCE Foreign Foreign Special Foreign Senior Employment Seeker Visitor Visa Spouse and Dependents Enrollment in National Health Insurance Spouse and Dependents Application for Alien Permanent (Note) Resident Certificate (APRC) Enrollment in Taiwan New (Note) Pension Scheme Loosen the Required Number of Days APRC Holders Need to Stay in Taiwan Application for Taiwan Personal (Note) Work Permit of Dependents Extend the Duration of Work Permit 4 in 1 Employment Gold Card Family Visitor Visa Tax Preferential Treatment Note:Terms and Conditions Apply PwC Taiwan 3
4 PwC OBSERVATION The new Act has included new legislations which tends to benefit the immediate family of the foreign nationals. By taking better care of their family and liberalizing legislations relating to working conditions in Taiwan, the goernment wishes to create a friendlier work enironment to further motiate foreign nationals to work in Taiwan. Currently, most of the details of the Act is yet to be confirmed as it is still being discussed internally by the goernment body. Further updates will be circulated once released by the Legislatie Yuan. PwC Taiwan 4
5 PwC Contacts: Corporate Income Tax and Indirect Tax Serices Jason Hsu (Leader) Howard Kuo Pei-Hsuan Lee Ying-Hsun Liu International Tax Serices Elaine Hsieh Paulson Tseng (EU Tax) Transfer Pricing & BEPS Serices Lily Hsu Financial Serices Tax Richard Watanabe Mergers & Acquisitions Tax Elaine Hsieh International Assignment Serices Li-Li Chou Corporate Secretarial Serices Jack Hwang Outsourcing and Accounting Serices Rosamund Fan Li-Li Chou Sam Hung Alis Lin Wilson Wang ext Wendy Chiu (US Tax) Patrick Tuan (China Tax) Elliot Liao Jessie Chen Alis Lin Tony Lin Sam Hung Rosamund Fan Jack Hwang Tony Lin Peter Su (ASEAN Tax) The information contained in this publication is of a general nature only. It is not meant to be comprehensie and does not constitute legal or tax adice. PricewaterhouseCoopers ( PwC ) has no obligation to update the information as law and practice change. The application and impact of laws can ary widely based on the specific facts inoled. Before taking any action, please ensure that you obtain adice specific to your circumstances from your usual PwC client serice team or your other tax adisers. The materials contained in this publication were assembled in October 2017 based on the law enforceable and information aailable as of October 18, In the eent of any discrepancy between the English information contained in this newsletter and the original Chinese ersion of the laws or rulings announced by the goernment, or any difference in the interpretation of the two ersions, the Chinese ersion announced by the goernment shall preail PricewaterhouseCoopers Taiwan. All rights resered. PwC refers to the Taiwan member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional adisors. PwC Taiwan 5
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