(I bolded in red the parts that will be of interest to us foreign residents.)
To establish a friendlier tax environment and to encourage foreigners and foreign entities to invest in Taiwan’s financial markets, the Ministry of Finance (MOF) has revised the Standards of Withholding Rates for Various Incomes and reduced a number of income tax rates. Pending approval by the Executive Yuan, the new rates will come into effect on Jan. 1, 2010.
According to these revisions, since Jan. 1, 2010 the withholding rate on the salaries of foreigners who have resided in Taiwan for less than 183 days within the same tax year will be reduced from 20% to 18%. The withholding rates for these foreigners for interest on commercial products such as short-term commercial papers and bonds will be reduced from 20% to 15%. Foreigners who have obtained an Alien Resident Certificate number and have resided in Taiwan for more than 183 days within the same tax year will continue to follow current regulations and be taxed as individual residents living in the R.O.C.
In addition, foreign residents who have stayed in Taiwan for more than 183 days within the same tax year will be subject to separate taxation at a uniform withholding rate of 10% on income from interest earned on short-term commercial papers, real estate, securitized products and transactions in structured products.
Finally, mainland Chinese citizens, juristic persons or entities staying in Taiwan for less than 183 days in a year will enjoy a reduced uniform tax rate of 20% on net dividends or net profits, regardless of whether their investment applications have been approved or not.