Information for Personal Income Tax Filling in Taiwan 2024
The period for personal tax filing in Taiwan is marked by May 2024. In accordance with the amendments to the Civil Code of Taiwan, as of January 1, 2023, individuals who have reached the age of 18 are legally considered adults. This change affects the eligibility for claiming dependents for tax exemptions. Specifically, the determination of whether one is an adult now adheres to the stipulations of the Civil Code. This means that whereas previously taxpayers could claim children as dependents until they reached 20 years old, from May 2024 onwards, children who have reached 18 years old will no longer be eligible for dependent claim, resulting in a decrease in available tax exemptions. However, children who are 18 years old or older and meet the following criteria may still be claimed as dependents: (1) they are enrolled in educational institutions; (2) they have physical or mental disability or are incapable of self-support and are being supported by the taxpayer.
The next item is the adjustment of the basic cost of living allowance. The essential living expenses per person have been increased from NTD 196,000 to NTD 202,000, representing an increase of NTD 6,000 from the previous reporting year. If a reporting household comprises multiple members, the tax reduction benefits can be enjoyed on a per capita basis.
Finally, the Controlled Foreign Corporation (CFC) system is now in effect. The CFC system has little impact on the public and is primarily applicable to Taiwanese business. If such business control a foreign company with a low tax burden through related persons (enterprises) and it is particularly noteworthy that if the individual, their spouse, and relatives within the second degree of kinship collectively hold more than 10% of the shares, and meet the legal requirements, they must still submit information to the National Taxation Bureau and disclose CFC information, even if they qualify for exemptions. It is important to note that if the combined income from CFC and overseas income within the same reporting household reaches NTD 1,000,000 it must be included in the annual gross income (for the alternative minimum tax system) declaration.
Additionally, recent announcements have been made regarding adjustments to the tax exemption threshold, standard deduction, and other amounts for 2024, including an increase in the deduction amount for rent from an itemized deduction to a special deduction, an enhanced deduction for pre-school children, and other benefits. However, it is important to note that as May 2024 marks the period for declaring income for 2023, the increases the benefits will only apply to the income tax declarations made in May 2025 for the fiscal year 2024. The adjustments will not be applicable for the tax fillings this May.
Adjustments to Various Deduction Amounts Applicable in May 2025:
Unit: NTD, table create on November 7, 2023
|
Item
|
Before Adjustment
|
After Adjustment (2024)
|
|
Tax
Exemptions
|
General
|
92,000
|
97,000
|
|
Taxpayers aged 70 and above, their spouses, and direct relatives supported by the taxpayer, with a 50% increase in exemption
|
138,000
|
145,500
|
|
Standard
Deduction
|
Single
|
124,000
|
131,000
|
|
Married Couple
|
248,000
|
262,000
|
|
Special Deduction for Salary Income
|
207,000
|
218,000
|
|
Special Deduction for Disability
|
207,000
|
218,000
|
|
Tax
Brackets
|
5%
|
0~560,000
|
0~590,000
|
|
12%
|
560,001~1,260,000
|
590,001~1,330,000
|
|
20%
|
1,260,001~2,520,000
|
1,330,001~2,660,000
|
|
30%
|
2,520,001~4,720,000
|
2,660,001~4,980,000
|
|
40%
|
4,720,001 and above
|
4,980,001 and above
|
|
Severance Income
|
A lump-sum retirement benefit
|
Retirement income amount is 0
|
The amount exceeds 188,000 times the years of service for retirement but does not reach 377,000 times the service years.
|
The amount exceeds 198,000 times the years of service for retirement but does not reach 398,000 times the service years.
|
|
Half of the income amount
|
The amount exceeding 377,000 multiplied by the years of service upon retirement
|
The amount exceeding 398,000 multiplied by the years of service upon retirement
|
|
Full of the income amount
|
The amount exceeding 377,000 multiplied by the years of service upon retirement
|
The amount exceeding 398,000 multiplied by the years of service upon retirement
|
|
Deduction for Instalment Retirement Income
|
814,000
|
859,000
|
|
Basic
Income
Tax
|
Basic income exemption (Individual)
|
6,700,000
|
7,500,000
|
|
Basic income exemption (Business)
|
600,000
|
600,000
|
|
Exemption for Insurance Death Benefits
|
33,300,000
|
37,400,000
|
|
|
