Taiwan has no US tax treaty, and the legislation that would change that is still pending.
There is no US–Taiwan income tax treaty and no totalization agreement. Taiwanese income tax is progressive to 40% and creditable on Form 1116, but there is no treaty relief and no relief from US self-employment tax. Legislation to provide double-tax relief has been under consideration in Congress.
Tax snapshot — Taiwan
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Sources: IRS Publication 54; IRS Publication 514; IRS Form 1116 instructions; Social Security Administration totalization agreement list; Rev. Proc. 2025-32; 31 CFR 1010.350. The status of US–Taiwan double-tax relief legislation should be confirmed before it is relied on. Checked 22 September 2026.
What that means on your return
Because relief would come through legislation rather than a treaty, its scope and start date are not settled. Treat the current position — credit only, no treaty — as the one to plan on, and treat any change as a reason to revisit rather than a reason to wait. [TBD — verify the status of the relief legislation before relying on it.]
At a 40% top rate, Taiwan is firmly in credit territory for higher earners: Form 1116 usually beats the exclusion and leaves your income counted as compensation for retirement purposes.
Semiconductor and engineering postings often come with equity. Restricted stock and options are where US and Taiwanese timing diverge most sharply, and the year each country taxes a vesting event may not be the same year — which is a credit-timing problem, not a rate problem.
National Health Insurance premiums, including the supplementary premium charged on certain income, are insurance contributions rather than income taxes. They do not belong on Form 1116, and with no totalization agreement they buy no relief from US self-employment tax either.
Anyone invoicing for their own services pays 15.3% US self-employment tax on net earnings whatever Taiwanese tax has been paid and whatever the credit does to the income tax side. An employee on a Taiwanese payroll does not carry that exposure, which makes the employment-or-contract question worth settling early.
If you are in Taiwan as a…
Questions I get about Taiwan
Can I claim treaty benefits in Taiwan?
No. There is no US–Taiwan income tax treaty. You claim a foreign tax credit for Taiwanese tax actually paid. Double-tax relief legislation has been under consideration in Congress, but its scope and timing are unsettled.
My equity vested in Taiwan. Which country taxes it first?
Both may, and often not in the same year. That timing mismatch is the main reason Taiwanese returns need the vesting schedule on the table before the return is prepared.
Are my National Health Insurance premiums creditable?
No. They are insurance contributions rather than income taxes, so they do not go on Form 1116, and they do not relieve US self-employment tax.
Does self-employment tax apply if I contract from Taiwan?
Yes, in full. With no totalization agreement, 15.3% SECA applies to net self-employment earnings regardless of Taiwanese tax paid or the credit claimed for it.
Should I claim the exclusion or the foreign tax credit in Taiwan?
It turns on your effective local rate. Where local tax is high the credit usually beats the exclusion and leaves your income counted for IRA purposes; where it is low the exclusion usually wins. Revoking the exclusion binds you for five years without IRS consent, so it is decided deliberately — that comparison is what the position review is for.
When is my return due?
15 June, under the automatic extension for filers living abroad. Form 4868 moves it to 15 October, and I file the extension free.
Do I have to file an FBAR for my Taiwanese bank account?
If your foreign accounts together passed $10,000 at any point in the year, yes. You can file it free through FinCEN's own system. The non-willful penalty for not filing is $16,536.
I have not filed for several years. What now?
The Streamlined Foreign Offshore Procedures: three returns, six FBARs and Form 14653 certifying non-willfulness. Penalties are waived. Note that the IRS terminated the separate Delinquent FBAR Submission Procedures around 1 July 2026.
Filing from Taiwan this year?
Fifteen minutes with the Enrolled Agent who will prepare and sign it. Complete return, $599.
An IRS Enrolled Agent working only on US tax for Americans living abroad. I prepare and sign every return myself — 14 years in practice, 11 of them as an Enrolled Agent.