During your first 30 days in Taiwan, you may drive using a valid International Driving Permit. The IDP is available through the American Automobile Association (AAA), and application information is available on the Internet at www.aaa.com. If you do not have an IDP, you may not drive in Taiwan until you have obtained a permanent Taiwan driver’s license. After your first 30 days in Taiwan, you must apply at the Motor Vehicles Office for an extension of your IDP.

How to get your International Driving Permit extended.

Depending on reciprocity with your home state (currently, every State with the exception of Florida, Oklahoma and South Carolina­), you can have your International Driving Permit extended by the Motor Vehicles Office, allowing you to continue driving in Taiwan until the end of the duration of stay on your visa OR the expiration date of your Alien Resident Certificate (ARC).
The following documents are required:

1. Valid International Driving Permit
2. Valid US driver’s license
3. Passport or ARC
4. Application form
5. One photo

There is no fee for this service.

How to apply for a Permanent Driver’s License.

If you have a Taiwan National ID Card and a valid US driver’s license OR
If you have an ARC and a valid driver’s license from a selected list of U.S. States (currently only Oklahoma), your driver’s license can be exchanged for the same class of license without your having to take a driving test.
The following documents are required:

1. ARC (must be valid for more than one year) or Taiwan National ID Card (both the original and one copy)
2. Valid US driver’s license (both the original and one copy)
   
   PLEASE NOTE: The license must have been authenticated in the US by the jurisdictional Taipei Economic and Cultural Office (TECO) or you can sign a statement swearing your license is legitimate and have it notarized at the American Institute in Taiwan (AIT).
   
   
3. Valid passport (both the original and one copy)
4. Health certificate issued by a Taiwan public hospital
5. Application form
6. Two photos
7. NT$200 fee

Foreigners who hold an ARC but do not have an accepted state driver’s license or International Driving Permit must go through the testing system in Taiwan. The testing materials are available in English in the Taipei area only.

Holders of a valid ARC and a Taiwan driver’s license may apply for the International Driving Permit of Taiwan.

Application can be submitted to the Motor Vehicles Office http://www.mvo.taipei.gov.tw/  
Taipei Office: 21, Section 4, Ba Per Rd. Tel: 02-27630155 ext. 201-203
OR   80, Section 5, Cheng Der Rd. Tel: 02-28314155 ext 325-327 (Shin-Lin branch)
You can also find related information on this website: http://iff.immigration.gov.tw/enfront/

Driving or riding as a passenger on a scooter or motorcycle in Taiwan can be very dangerous.  Three American citizens in Taiwan have died in scooter accidents in recent years.  If you choose to ride a scooter, use extreme caution.