In response to the September 2025 amendments to the “Act for the Recruitment and Employment of Foreign Professionals” (the “Act”), the Taxation Administration of the Ministry of Finance amended the “Regulations Governing Reduction and Exemption of Income Tax of Foreign Specialist Professionals” (the “Regulations”) on March 2, 2026, with retroactive effect from January 1, 2026.

These amendments of the Regulations primarily align with Article 4, Paragraph 2 of the Act by expanding the scope of “specific expertise” for foreign special professionals to include the fields of digital technology, environmental protection, and biotechnology. In addition, following the establishment of the Ministry of Sports, the “physical education” category has been revised to “sports.” The amendments also relax eligibility requirements for applying for tax incentives to better reflect practical needs. The key changes are summarized below:

1. Relaxation of the starting point for eligibility for tax incentives: Where a foreign specialist professional engages in the same professional work under the same employment contract and applies for a foreign special professional work permit or Employment Gold Card, and also applies (either simultaneously or subsequently) for other work permits, if such other work permit is obtained first, then upon subsequently obtaining the foreign specialist professional permit or Gold Card, the individual may be deemed retroactively qualified as a foreign specialist professional from the date of obtaining the earlier work permit, and may apply for the tax incentives accordingly (Article 3, Paragraph 4 of the Regulations).

2. Relaxation of the rules for calculating days of residence in Taiwan: In recognition that overseas compatriot and foreign students are key targets for recruitment and retention, the Regulations clarify that, for purposes of determining whether an individual qualifies as a “individual residing in the territory” (i.e., staying in Taiwan for 183 days or more in a taxable year) under Article 7, Paragraph 2, Subparagraph 2 of the Income Tax Act—as referenced in Article 3, Paragraph 1, Subparagraph 3 and Paragraph 2 of the Regulations—the period during which such individuals study in Taiwan, as well as any extended residency permitted under Article 12 of the Act, shall not be counted toward the 183-day threshold. This is intended to strengthen incentives for such individuals to remain and work in Taiwan after obtaining their degrees (second half of Article 3, Paragraph 5 of the Regulations).

3. If a foreign specialist professional changes employer or position during the five-year tax incentive period, the remaining period may still qualify for continued application of the tax incentives (Article 4, Paragraph 4 of the Regulations).

4. The Regulations specify the legal consequences where a foreign specialist professional fails to apply for the tax incentives within the prescribed period or fails to provide supplementary documentation within the required timeframe (Article 5, Paragraphs 2 and 3 of the Regulations).

Since the Act came into force on February 8, 2018, provisions relating to the Employment Gold Card and tax incentives have been key areas of concern for both domestic enterprises and foreign professionals. Taiwanese companies should pay close attention to these amendments to the Regulations, as the relaxed eligibility criteria for tax incentives are expected to enhance the recruitment of foreign professionals and increase their willingness to remain in Taiwan on a long-term basis.

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References:

1. General Explanation of the Amendments to the Regulations Governing Reduction and Exemption of Income Tax of Foreign Specialist Professionals.

2. Conditional Relaxation of Tax Incentives for Foreign Professionals, available at: https://money.udn.com/money/story/6710/9357430

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