Taiwan Tax Deductions Increased from
2008 Onward
December 1, 2008. The Taiwan Cabinet has reached consensus with
lawmakers screening amendments to the Income Tax Act that the four
increased individual income tax deductions allowed by the amendments
will be applicable in May 2009 when taxpayers file their 2008 returns,
Minister of Finance Lee Sush-der disclosed December 1, 2008. Lee
made the disclosure to reporters after giving a report before the
Finance Committee of the legislature on the proposed amendments to
Clause One of Article Five, Article 17 and Article 126.According to
Lee, the Ministry of Finance plans to increase the standard tax
deduction from individual income from the current NT$46,000 to NT$60,000
for an unmarried taxpayer and from NT$92,000 to NT$120,000 for a married
couple.
A salary or wage earner’s special deduction will be increased from
NT$78,000 per salary or wage earner to NT$NT$100,000, while the
deduction for the disabled will also be raised from the current
NT$77,000 per disabled person to NT$100,000.
The proposed amendments will also grant a deduction of NT$25,000 per
student in each household for higher education expenses, instead of the
current NT$25,000 for each tax return.
The Ministry of Finance has estimated that the four increased
deductions would affect 3.6 million families in Taiwan, accounting for
69 percent of the 5.18 million households that file tax returns each
year.
According to law, the amendments adopted in 2008 should be
implemented only in 2010, making them good for the 2009 income tax
returns. But legislators of the ruling Kuomintang said this will not be
a problem, because they will introduce another amendment to allow the
newly increased deductions to be applied to the 2008 tax year.
Individual income tax is levied on Taiwan-source income of both
resident and non-resident individuals per calendar year.
Individuals are considered residents in Taiwan for tax purposes if
they are Republic of China citizens or if they are foreign nationals who
reside in Taiwan for at least 183 days within a calendar year.
They are subject to income tax on all their incomes which originate
in Taiwan and must file income tax returns and pay taxes between May 1
and 31 of the following year.
The incomes of the taxpayer, taxpayer’s spouse, and dependents must
be consolidated and reported on one income tax return. Resident
taxpayers are allowed to claim personal exemptions and deductions on
their tax returns.
Source: Central News Agency December 2, 2008
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