Office based in US, working remotely in Taiwan

[ballhog409]

I am working remotely for a company with offices in both United States and Taiwan. I have both US and Taiwan citizenship. If I work remotely in Taiwan, is there any tax advantage/disadvantage for my company in the US? I'm trying to pitch the idea to my manager but if I have some concrete advantages gained by my company, that would help my cause (e.g. possible savings because I don't need health insurance, tax savings, etc). Has anyone had to sell this idea? Thanks for your help!

[headhonchoII]

You could get paid offshore but work from Taiwan , up to you then to report your tax as you wish in Taiwan, in that case you maybe can accept less gross salary.

You can also get your medical cover through Taiwanese national health card which should be a lot cheaper than the US private insurance ,you can get this though your Hukou in Taiwan and pay the premium as a family member not as an employee, in this manner your employer does not need to make matching contribution.

You don't need dental cover because that is included in the Jian Bao health cover also to a degree.

[ballhog409]

Thank you for the response, HeadHonchoII. I'm guessing that my employer will still have to pay all the social security tax, medicare tax, worker's comp & unemployment insurance tax. Does anyone know that this is the case? If so, then the only savings I can offer my company by working in Taiwan is the medical insurance (currently paid for by my company). It's a sizeable amount ($4k) but I am hoping that there are other advantages to be gained by my company.

[headhonchoII]

It depends if you want to report your salary and bring it into Taiwan or leave it offshore eg HK. The US insists on taxing US citizens , but the it only really starts at 90k/yr I heard.

Im not sure if they need to see evidence of you paying tax in another jurisdiction to avoid tax in the US.

One simpler way to go about this is to establish your salary as per normal in Taiwan, pay local taxes and labour insurance and health premiums and tell employer the health insurance will be cheaper and you will take 10% off your salary due to slightly lower cost in Taiwan. Wouldn't be a good idea to offer to drop your salary too much though.

[ballhog409]

Yeah, I don't plan to offer a pay cut From what I have been able to research, I know that there is a foreign earned income exclusion but only after I can prove that I have lived in Taiwan for more than 330 days in a year. Since I don't earn more than 90k, I should be able to get the federal income tax back, which should more than offset the cost of insurance in Taiwan.

I have also read that since my remote office is in the US and not in Taiwan (and I am getting paid in US), there is no way for Taiwan's government to track the salary so there is no need to file income tax.

So I guess as far as the US government and my company is concerned, it should be business as usual. My company still report and pay taxes since I'm employed from the US office and it is up to me to prove and claim the foreign earned income exclusion. Maybe my case is simpler because I can legally stay in Taiwan without the need for a work visa?

[Shaktipalooza]

Yeah, I don't plan to offer a pay cut From what I have been able to research, I know that there is a foreign earned income exclusion but only after I can prove that I have lived in Taiwan for more than 330 days in a year. Since I don't earn more than 90k, I should be able to get the federal income tax back, which should more than offset the cost of insurance in Taiwan.

I have also read that since my remote office is in the US and not in Taiwan (and I am getting paid in US), there is no way for Taiwan's government to track the salary so there is no need to file income tax.

So I guess as far as the US government and my company is concerned, it should be business as usual. My company still report and pay taxes since I'm employed from the US office and it is up to me to prove and claim the foreign earned income exclusion. Maybe my case is simpler because I can legally stay in Taiwan without the need for a work visa?

Are you a dual citizen? You say you can legally stay in Taiwan without a work visa, that doesn't sound like a green light to live and work in Taiwan. If you are working in Taiwan will you be working in your company's office? From the tone of your statement it sounds like you intend to do this under the table, without the Taiwanese governments knowledge. That likely will not fly with your company.

It also sounds like you're trying to work the system both ways. Saying you are resident in Taiwan, not paying Taiwan income tax, yet wanting the 90k tax deduction, all while being paid US dollars in a US account. Am I getting this right??

[headhonchoII]

I doubt the tax deduction will be so easy just because you live in Taiwan. If the money goes to a third country it might be easier.
You are supposed to report all income now in Taiwan but obviously hard for them to track.

[ballhog409]

Yes, I have dual citizenship. If I need to pay taxes in Taiwan, that is not a problem. I just read that someone tried to pay taxes but since there is no record in Taiwan, they don't know what to file.

@shaktipalooza, can you explain what you mean by "it won't fly with my company?" That's really a key part of my question...can I work in Taiwan remotely and still "work" out of the US office? Without being classified as an expat or be transferred to the company office in Taiwan?

[Shaktipalooza]

Yes, I have dual citizenship. If I need to pay taxes in Taiwan, that is not a problem. I just read that someone tried to pay taxes but since there is no record in Taiwan, they don't know what to file.

@shaktipalooza, can you explain what you mean by "it won't fly with my company?" That's really a key part of my question...can I work in Taiwan remotely and still "work" out of the US office? Without being classified as an expat or be transferred to the company office in Taiwan?

I have to run but suggest you start browsing the IRS site information for international taxpayers.

[ballhog409]

Thanks, Shaktipalooza. Tax rules seem pretty straight forward. I can always consult a tax professional to make sure it is taken care of properly. Do you know if there are any reasons why my company would not go for this? Do they have to classify me as an expat? Is there any tax responsibilities/form filing needed from my company? Any other obstacles you can think of? Thanks again for sharing, guys.