If you’re working for a foreign company in Taiwan and receiving RSUs, joining an ESPP, or thinking of exercising stock options (SO), your first thought is often:
“When should I sell for the best return?”
But from our experience helping expat professionals with tax reviews and filings, here’s what we’ve learned — the real risk isn’t in timing the sale… it’s in understanding the tax!
How Taiwan Treats RSU, ESPP & SO for Tax Purposes
RSU (Restricted Stock Units)
Once your RSUs vest, the market value at that time is treated as “other income” (coded 92), and is taxable as part of your annual personal income tax — even if you haven’t sold the shares.
Later on, if you sell those shares and realize gains, it may be classified as foreign-sourced capital gains, and trigger additional tax filing under Taiwan’s Alternative Minimum Tax (AMT) if thresholds are exceeded.
ESPP (Employee Stock Purchase Plan)
If you buy company shares at a discount, that discount is also treated as taxable “other income.”
Again, any gains upon selling the shares may count as foreign-sourced income — watch out for AMT exposure.
SO (Stock Options)
When you exercise your options, the difference between market value and grant price is counted as taxable income (again, “other income”).
Later sales may create capital gains and further tax exposure.
Also note: the tax treatment may differ depending on how you exercise — Cash exercise, Same-Day Sale, or Sell-to-Cover each has its own tax impact.
How Does Taiwan’s Tax Office Know About Your Foreign Income?
Think your foreign stock sales are invisible? Think again. Here’s how Taiwan’s tax authority tracks foreign-sourced income:
CRS (Common Reporting Standard)
Taiwan exchanges financial account data with countries like Australia, Japan, and the UK — your foreign bank/portfolio may already be reporting your info.
Unusual Remittances
Large incoming or outgoing bank transfers are flagged, and the Tax Bureau can cross-check the flows with your tax filings.
Data Cross-Referencing
The government uses data analytics to compare income, assets, foreign filings, and your reported income. Inconsistencies = audit risk.
What LY CPA Firm Recommends:
Your RSUs, ESPPs & SOs are compensation, not investments.
Taiwan sees them as part of your salary, so they’re taxed differently from capital gains.
Early planning helps you lower your tax burden.
Spreading out exercises, timing your sales, or coordinating with other income sources can help you avoid hitting tax thresholds.
The foreign income threshold is easier to hit than you think.
Once your annual foreign income exceeds NT$1 million, AMT rules may apply — don’t assume your company’s withholding is enough!
Not sure how your RSU, ESPP, or SO income will be taxed in Taiwan?
Worried about missing Taiwan’s foreign income AMT filing thresholds?
Reach out to LY CPA Firm — we’ll help you get clear and compliant, without surprises.
