Taiwan Buyers
Taiwan's Minimum Tax on Overseas Income
What Taiwan's Alternative Minimum Tax (最低稅負制) actually does to rental income or a capital gain from a Malaysian property — the NT$1 million reporting threshold, the current exemption amount, and the 20% rate, explained without the scare tactics.
Quick summary
Quick answer
Best for
Risk level
Buyer action
| Best for | Taiwanese buyers who already have, or are about to have, Malaysian rental income or a capital gain, and want to know when it actually becomes taxable back home. |
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| Risk level | Medium |
| Buyer action | If you're weighing a Malaysian purchase from Taiwan, ask Lewis for current projects that fit your budget and situation — including the foreigner-eligibility check, latest packages, and a side-by-side of the areas discussed here. |
This Is Not a Second Income Tax on Everything Overseas
Taiwan's minimum tax on overseas income — formally the Income Basic Tax (基本稅額), governed by the Income Basic Tax Act (所得基本稅額條例) — is an alternative minimum tax, not an additional flat tax on foreign income. The mechanism compares two numbers: your regular income tax liability, and a separately calculated 'basic tax amount' that adds back certain items excluded from ordinary taxable income, including overseas income. You only pay the difference if the basic tax amount is higher. For a Taiwanese resident individual whose income is mostly Taiwan-sourced salary with a modest Malaysian rental unit on the side, the regular tax calculation is very often still the higher of the two, meaning the minimum tax changes nothing in practice. This is the single most misunderstood point among first-time overseas property buyers, who sometimes assume any foreign rental income is an automatic extra tax layer.
The NT$1,000,000 Reporting Threshold
The trigger for even considering the minimum tax is a household reporting threshold: once a tax filing unit's total overseas income for the year reaches NT$1,000,000 or more, that overseas income must be included in the basic income calculation. Below that threshold, overseas income doesn't need to be added into the basic-tax computation at all. A single rental unit in KLCC or Penang generating, say, RM3,000-4,500 a month in gross rent translates to roughly NT$280,000-430,000 a year at current exchange — comfortably under the threshold on its own. The number that pushes a household over NT$1,000,000 is usually a property sale, a lump-sum overseas insurance payout, or several income sources stacked in the same household filing in the same year — not ordinary annual rent from one unit.
DISCUSS WITH LEWIS
The number that actually matters isn't the NT$1 million reporting threshold — almost any rental property crosses that eventually — it's whether your basic tax amount clears the roughly NT$7.5 million exemption once combined with other basic-tax items like insurance payouts or certain trust income. I've seen Taiwanese clients over-worry about a single rental unit and under-worry about stacking a property sale gain in the same year as other overseas income. Model the two together with an accountant before a disposal year, not after.
The Exemption and the 20% Rate
Once overseas income (plus any other basic-tax items) is included, the calculation subtracts a fixed exemption before applying tax — this exemption is CPI-indexed and has been raised over time, most recently reported around NT$7,500,000, up from a prior NT$6,700,000. Only the amount above the exemption is taxed, at a flat 20% rate, to arrive at the 'basic tax amount'. That amount is then compared against your regular tax bill; you pay only the positive difference if the basic amount is higher, on top of your ordinary tax, not instead of it. Because the exemption is a household-level figure covering all basic-tax items combined, not a per-property allowance, a single overseas rental unit generating a few hundred thousand NTD a year in net income is very unlikely to push most households anywhere near this threshold on its own.
Where This Actually Bites: Disposal Years and Stacking
The scenario worth planning around is a property sale (or a large one-off overseas item) landing in the same tax year as other income that also counts toward the basic-tax base. Malaysia's own Real Property Gains Tax already taxes a foreign seller's gain at 30% within the first five years of ownership and 10% from year six onward — a cost that applies regardless of what happens on the Taiwan side. If a disposal gain, once converted to NTD, pushes the household's combined basic-tax items past the roughly NT$7.5 million exemption, the 20% Taiwan-side calculation kicks in on the excess, and the household pays whichever of the two tax calculations is higher. Sequencing — spreading a large disposal or income event across tax years where possible, and knowing the numbers in advance — is the practical lever here, not avoidance.
What I'd Verify Before Acting
The exemption amount is adjusted periodically for CPI and has changed before — confirm the figure that applies to the tax year you're actually filing for with an accountant or the National Taxation Bureau, not this post. Currency conversion for the NT$1,000,000 and NT$7,500,000 thresholds uses the exchange rate rules set by tax authorities for the relevant year, which may differ from a simple spot-rate conversion. This is general information about how the mechanism works, not a calculation of your personal liability — a resident individual with any complexity (multiple properties, other basic-tax items, joint filing considerations) should get a specific calculation from a Taiwan-licensed accountant before a purchase or disposal, and treat nothing here as tax advice.
Buyer checklist
Owning a Malaysian property does not automatically trigger Taiwan's minimum tax. It only becomes relevant once your household's total overseas income for the year reaches NT$1,000,000, and even then, tax is only actually payable if your 'basic tax amount' — calculated after a current exemption in the region of NT$7,500,000 — exceeds what you'd otherwise owe under the regular income tax system. For most individual buyers with one rental unit, this rarely bites; it starts to matter when overseas rental income, capital gains and other basic-tax items stack up together in one year.
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| 1 | Track your household's total overseas income for the year — the NT$1,000,000 threshold is what triggers basic-tax inclusion, not any single property |
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| 2 | Model a property disposal year separately, combining the RPGT-taxed gain with any other overseas income in the same year |
| 3 | Confirm the current basic-tax exemption amount with an accountant before filing, since it is CPI-indexed and has changed before |
| 4 | Keep records of Malaysian rental income and any RPGT paid, since both feed into the Taiwan-side calculation |
| 5 | Get a specific calculation from a Taiwan-licensed accountant if you hold more than one overseas property or have other basic-tax items |
Common questions
Does buying one Malaysian condo automatically mean I owe more tax in Taiwan?
Not automatically. It only enters the calculation once your household's overseas income for the year reaches NT$1,000,000, and even then you only pay extra if the resulting basic tax amount exceeds your regular tax bill — which a single modest rental unit rarely does on its own.
Is the NT$1,000,000 threshold per property or per household?
Per tax filing household (you, your spouse, and dependents on the same return), combining all overseas income sources — not per individual property. A single unit's rental income and a separate disposal gain in the same year would be added together.
Do I still pay Malaysian tax on top of any Taiwan basic tax?
Yes — Malaysia's 28% non-resident withholding on rental income and RPGT on any gain apply regardless of Taiwan's treatment. The Taiwan minimum tax is a separate, additional calculation on the Taiwan side, not a substitute for Malaysian tax.
How often does the exemption amount change?
It's adjusted for cumulative CPI movement under the Income Basic Tax Act, so it doesn't change every year, but it has moved from roughly NT$6.7 million to around NT$7.5 million over recent years. Confirm the figure for your actual filing year with an accountant.
Lewis Chong
REN 69566 · IQI GlobalProperty advisor helping KL, JB, and Penang buyers make data-backed property decisions.
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Use one buyer framework across different news.
Price Per Ping: What a Taipei Budget Buys in Kuala Lumpur and Johor Bahru
Taipei and New Taipei price per ping converted into RM per square foot, set against real KLCC, Klang Valley and Johor Bahru pricing — so a Taiwanese buyer can see what the same NTD actually buys.
Lewis Conclusion
I show Taiwanese clients this comparison first because it does more work than any sales pitch: a Xinyi 2-room budget in Taipei can buy a full KLCC unit with room to spare, or several units in Klang Valley suburbs or Johor Bahru. But price-per-area alone doesn't tell you about rental yield, holding cost or exit liquidity — a cheap ping doesn't automatically mean a good investment. Use this as the opening number, then look at yield and title type before deciding where.
Taiwan's CFC Rules: What Happens If You Hold Malaysian Property Through a Company
Taiwan's individual CFC (受控外國企業) regime, in force since 2023 — the 10% shareholding trigger, the NT$7 million de minimis exemption, and why holding a Malaysian property through an offshore company rarely saves a Taiwanese individual any tax.
Lewis Conclusion
I steer most individual Taiwanese buyers away from a company structure for a single Malaysian property. The 2023 CFC rules were written specifically to close the offshore-holding-company loophole, and for one condo generating modest rental income, the compliance burden of tracking CFC earnings and the NT$7 million de minimis threshold usually outweighs any benefit. A company structure can still make sense for a genuine multi-property portfolio, estate planning, or a joint venture with other investors — but that's a decision to make with a cross-border tax advisor, not a default choice for a single unit.
Remitting Funds Out of Taiwan
Taiwan's individual foreign exchange settlement cap — raised from USD 5 million to USD 10 million a year in November 2024 — the NT$500,000 per-transaction reporting threshold, and the documents a bank asks for once a single transfer clears USD 500,000.
Lewis Conclusion
The USD 10 million annual cap means the ceiling itself is a non-issue for almost every individual property buyer — a typical Malaysian purchase, even a large one, sits nowhere near it. The part that actually trips people up is the documentation step at USD 500,000 per transaction, which most Taiwanese buyers don't hit on a single condo purchase but do sometimes hit when funding a larger landed property or combining a purchase with renovation costs in one transfer. My advice is procedural, not tax advice: get your SPA, loan agreement (if any) and lawyer's letter in order before you go to the bank, not after they ask.
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Track your household's total overseas income for the year — the NT$1,000,000 threshold is what triggers basic-tax inclusion, not any single property
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Model a property disposal year separately, combining the RPGT-taxed gain with any other overseas income in the same year
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Confirm the current basic-tax exemption amount with an accountant before filing, since it is CPI-indexed and has changed before
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Keep records of Malaysian rental income and any RPGT paid, since both feed into the Taiwan-side calculation