Law Articles
2026-10-15
Law Articles
Naturalization Procedures and Legal Obligations for Nationals Without Household Registration in the Taiwan Area Part 2
【Zhong Yin Law Firm Partner Annika Kuo / Attorney Yiju Wu】
annika.kuo@zhongyinlawyer.com.tw
annika.kuo@zhongyinlawyer.com.tw
Once an ROC national establishes household registration in Taiwan, that national becomes subject, under specified conditions, to statutory obligations regarding military service, taxation, and enrollment in National Health Insurance. Each is explained below.
(1) Military Service Obligation
Ⅰ. Age and Length of Service
Any male who holds ROC nationality and either previously had household registration in Taiwan, or who, having resided abroad, establishes Taiwan household registration for the first time, is subject to the statutory obligation of military service beginning on January 1 of the year following the year in which he turns 18, until his discharge on December 31 of the year in which he turns 36. The length of service depends on the conscript's date of birth:
i. Conscripts born on or after January 1, 2005 must serve one year of military service.
ii. Conscripts born between January 1, 1994 and December 31, 2004 must serve four months of military service.
iii. Conscripts born on or before December 31, 1993 who have not been conscripted, or called up for supplementary conscription, must instead perform one year of alternative service.
Ⅱ、Grace Period Before Conscription
A male National Without Household Registration who holds overseas-Chinese status and falls within the above age range becomes subject to conscription under the law 183 days after the day following the date on which he first establishes household registration upon returning to Taiwan. A male aged 18 to 36 who was not an ROC national at birth, but who has since naturalized to acquire ROC nationality, becomes subject to conscription by the Taiwan government one year after the day following the date of his initial household registration.
(2) Tax Obligations
Under the Income Tax Act, an individual who is a “Resident of the Republic of China” must file a comprehensive individual income tax return with respect to “Income from Sources in the Republic of China,” and must pay any shortfall under the Alternative Minimum Tax with respect to “Foreign-source Income.” An individual who is a “Non-resident of the Republic of China” is subject only to withholding tax at source on Income from Sources in the Republic of China, and is not subject to tax on Foreign-source Income. This is explained further below.
Ⅰ. Definition of a “Resident of the Republic of China”
An individual is a “Resident of the Republic of China” if the individual meets any one of the following criteria:
i. Residing in Taiwan for a total of at least 31 days within a tax year
If an individual has household registration within the ROC, and resides within the ROC for a total of at least 31 days during a tax year, the tax authorities will treat the individual as a “Resident of the Republic of China” under the Income Tax Act.
ii. Residing in the ROC for less than 31 days within a tax year, but maintaining the center of the individual's life and economic activity within the ROC
If an individual has household registration within the ROC, and resides within the ROC for a total of less than 31 days during a tax year, but nonetheless maintains the center of the individual's life and economic activity within the ROC, the tax authorities will likewise treat the individual as a “Resident of the Republic of China.” Whether the “center of the individual's life and economic activity” is located within the ROC is determined by reference to the individual's family and social ties, participation in political, cultural, and other activities, occupation, place of business, and place of asset management, taking into account, among other things:
(a) Enrollment in social welfare programs such as National Health Insurance, Labor Insurance, National Pension Insurance, or Farmers' Health Insurance.
(b) Whether the individual's spouse or minor children reside within the ROC.
(c) Whether the individual operates a business, practices a profession, manages assets, is employed to provide services, or serves as a director, supervisor, or manager within the ROC, together with any other circumstances of the individual's life and economic interests sufficient to establish that the center of the individual's life and economic activity is within the ROC.
iii. Having no domicile within the ROC, but residing within the ROC for a total of at least 183 days within a tax year
An individual who has no domicile within the ROC, but who resides within the ROC for a total of at least 183 days during a tax year, is likewise treated by the tax authorities as a “Resident of the Republic of China.”
Ⅱ. A Resident of the Republic of China Must File a Comprehensive Income Tax Return With Respect to Income from Sources in the Republic of China
An individual falling within the above categories must file a comprehensive individual income tax return with respect to “Income from Sources in the Republic of China” — that is, income derived from within the ROC, such as rental income from property located within the ROC or compensation for services performed within the ROC — and such income is subject to progressive tax rates ranging from 5% to 40%.
Ⅲ. A Resident of the Republic of China Must Pay Any Shortfall in the Alternative Minimum Tax With Respect to Non-Republic of China source income (Foreign Income)
A Resident of the Republic of China must also assess and calculate tax payable on Foreign-source Income according to the following standards:
i. Overseas income exceeding NT$1,000,000 within a single filing household in a given year must be included in full in the taxpayer's basic income
Where a single filing household (meaning the taxpayer, together with the taxpayer's spouse and any dependents required to file jointly, considered together) has total annual overseas income of NT$1,000,000 or more, that overseas income must generally be included in full in the calculation of the taxpayer's basic income. For example, if overseas income for the year is NT$1,200,000, the full NT$1,200,000— and not NT$200,000— must be included in basic income.
ii. The NT$7,500,000 taxable threshold for basic income
Once overseas income reaches NT$1,000,000 or more, that overseas income must be added to the taxpayer's net comprehensive income, together with any other items required to be included in basic income (such as certain insurance payouts or gains from securities transactions), to calculate the taxpayer's basic income. If basic income exceeds NT$7,500,000, the amount in excess of that threshold is subject to a 20% tax rate in calculating the basic tax amount.
iii. Calculating the Additional Basic Tax Payable
A shortfall in the alternative minimum tax is payable only if the basic tax amount exceeds the taxpayer's regular income tax amount, and a positive difference remains after crediting any foreign income tax already paid on the overseas income.
iv. Illustrative Example
Suppose Tom is a Resident of the Republic of China with Income from Sources in the Republic of China of NT$4,000,000. After deducting all applicable exemptions and deductions, Tom's net comprehensive income is NT$3,550,000, on which Tom owes comprehensive income tax of NT$400,000. Tom also has Foreign-source Income of NT$6,000,000.
Applying the standards above, because Tom's filing household has annual Foreign-source Income of NT$1,000,000 or more, that overseas income must be included in full in Tom's basic income. Tom's basic income is therefore his net comprehensive income of NT$3,550,000 plus his Foreign-source Income of NT$6,000,000, totaling NT$9,550,000 — which exceeds the NT$7,500,000 threshold by NT$2,050,000 (NT$9,550,000 − NT$7,500,000 = NT$2,050,000). This excess amount is subject to a 20% basic tax rate, yielding a basic tax amount of NT$410,000 (NT$2,050,000 × 20% = NT$410,000). This basic tax amount of NT$410,000 is then reduced by Tom's regular comprehensive income tax of NT$400,000 and by any foreign tax already paid on the Foreign-source Income; only the remaining balance, if any, is payable as the alternative-minimum-tax shortfall. If no balance remains after these credits, no additional tax is due.
Ⅳ. Income from sources in the Republic of China derived by a non-resident of the Republic of China shall be subject to tax withheld at source.
Under Article 2, Paragraph 2, and Article 73 of the Income Tax Act, an individual who is not a Resident of the Republic of China, but who has Income from Sources in the Republic of China, is subject to withholding at source by the withholding agent (i.e., the company, government agency, organization, school, or business making the payment), at the withholding rate applicable to the relevant category of income, and is not required to file an annual tax return — in other words, the payer withholds and remits the tax directly to the government at the time of payment. Income not subject to withholding — such as gains from the transfer of property, for example the sale of a patent — must instead be reported and taxed at the applicable withholding rate.
In addition, a Non-resident of the Republic of China who resides within the ROC for a total of more than 90 but fewer than 183 days within a tax year must, with respect to compensation received from an overseas employer for services performed within the ROC, report and pay tax on such compensation at the applicable withholding rate on the individual's own initiative.
Because individual tax circumstances vary and can be complex, it is advisable to consult a qualified accountant for further guidance.
(3) Tax Incentives
In connection with the Taiwan government's “House Tax 2.0” reform, the Ministry of Finance has issued an interpretive ruling providing that, where a foreign national, a National Without Household Registration in the Taiwan Area, a resident of Mainland China, or a resident of Hong Kong or Macau holds a Taiwan R.O.C. (Taiwan) Resident Certificate, and the land and building at the address of residence (including a right-of-use dwelling built on land subject to a superficies right) is owned by, or its right of use is held by, that person, that person's spouse, or a lineal relative, the property will be treated as if household registration had been completed with respect to that property. Once actual or deemed household registration has been completed, the following tax incentives become available, subject to the applicable conditions:
Ⅰ.Preferential Owner-Occupied Rate for House Tax
If a house at the address of household or residence registration is neither rented out nor used for business purposes, and the owner (or the owner's spouse or minor child) has completed household registration for, and has held and actually resided in, that house continuously for six years, and the owner, spouse, and minor children together own no more than three owner-occupied residential properties nationwide, House Tax may be assessed at the preferential owner-occupied rate of 1.2%. If the household owns only one such property nationwide and its assessed value is below a specified threshold, House Tax may instead be assessed at the preferential single-owner-occupied rate of 1%.
Ⅱ. Preferential Owner-Occupied Rate for Land Value Tax
If land is neither rented out nor used for business purposes, and the land area does not exceed 300 square meters in an urban area or 700 square meters in a non-urban area, Land Value Tax may be assessed at the preferential owner-occupied residential land rate of 2‰ (2 per thousand); however, this preferential rate is limited to one property per owner, spouse, and dependent minor child.
Ⅲ. Preferential Owner-Occupied Treatment Under the House and Land Transactions Income Tax Upon Sale of a Residence
If, during the six years prior to the sale of the owner-occupied house and land, the property was neither rented out, used for business, nor used to carry on a profession, and if the taxpayer, the taxpayer's spouse, and minor children did not claim the same preferential treatment during that six-year period with respect to any other property, the taxpayer may claim an exempt amount of NT$4,000,000 of gain on sale, with any taxable gain in excess of NT$4,000,000 taxed at a preferential rate of 10%.
(4) National Health Insurance Enrollment Obligation
Ⅰ. Once Household Registration Is Completed, a Minimum Monthly National Health Insurance Premium of NT$826 Becomes Payable
In order to close a funding gap in the National Health Insurance system, and to prevent individuals residing abroad from entering Taiwan solely to make opportunistic use of Taiwan's medical resources, the law provides that any person who has household registration in Taiwan — even if that person resides abroad on a long-term basis — must, beginning six months after household registration is completed, enroll in National Health Insurance and pay the applicable premiums on time. A person without an employer or job in Taiwan must pay a minimum monthly premium of NT$826; a person with an employer or job in Taiwan pays a premium that varies according to occupational category and salary (for the applicable premium brackets, see: https://www.nhi.gov.tw/en/cp-19435-fdaba-114-2.html). Individuals residing overseas may pay premiums via automatic debit from a Taiwan bank account or credit card.
Ⅱ. Failure to Pay National Health Insurance Premiums on Time May Result in Administrative Penalties
If premiums remain unpaid beyond the 15-day grace period, a late-payment surcharge of 0.1% of the outstanding amount will accrue daily, up to a maximum of 5% of the outstanding amount. If premiums remain unpaid 150 days after the due date, the National Health Insurance Administration, Ministry of Health and Welfare, may refer the matter for administrative enforcement, including attachment of the debtor's assets (such as wages, bank deposits, or securities). In addition, if the individual does not enter Taiwan within two years after completing household registration, that household registration will, by operation of law, be canceled (removed from the household register), and National Health Insurance eligibility will terminate accordingly.