In this section, we will cover the essentials of the Taiwan Estate and Gift Tax: general principles, who pays, how much is owed, and what exemptions are available.
We will not cover trusts in depth in this article, due to their high degree of complexity. We may cover trusts in a future part of this series.
General Principles of Taiwan’s Estate and Gift Tax
Please note that this is NOT an exhaustive list of the rules, but an overview of key principles. For the exact specifications of the Estate and Gift Tax Act, refer to the full text of the law, or consult a licensed tax professional for advice.
MOJ References (full text of the act):
Taiwan (ROC) citizens vs. non-ROC citizens
All worldwide property and gifts given by ROC citizens are subject to estate and gift taxes.
Foreign estate and gift taxes paid on overseas properties can be deducted from estate and gift tax owed in Taiwan (with some restrictions).
Property of and gifts from non-ROC citizens are only subject to estate and gift taxes if the property is located in Taiwan.
What is taxed?
Estate taxes: financial assets, real property, any rights and interests with monetary value, and trusts.
Gifts: any property transferred from a donor to a donee who accepts the offer; forgiveness or assumption of debt on another’s behalf; purchases made on behalf of others (without repayment); sales of property between relatives.
Note: while trusts are subject to estate tax, in general, they are not subject to gift tax (depending on whether the property is transferred to the beneficiary).
Who pays the tax?
Estate tax (in order of precedence):
The executor of the will.
Heirs.
An administrator appointed by legal authority.
Gift tax: the giver of the gift is liable to pay taxes. In the case, the giver (donor) cannot or does not pay the gift tax, the recipient (donee) is then liable.
When is the tax paid?
Estate tax: taxes must be paid before the estate is divided, or any of the property in the state is transferred.
Gift tax: taxes must be paid before the transfer of title occurs.
How is the value of the estate or gift determined?
Estate: the estate is valued at the time and date of death of the decedent.
Gift: the gift is valued at the prevailing value of the goods on the date of the gift.
Note: determining the exact value of estates and some gifts (especially trusts) requires some expertise and can involve lengthy procedures. We recommend consulting and seeking professional guidance to ensure you receive fair, accurate, and favorable valuations.
Calculating Estate Taxes in Taiwan
Taiwan uses a progressive taxation system for estate taxes, as seen below:
Estate Tax
Value of Taxable Estate | Tax Rate |
Under TWD 50 million | 10% |
TWD 50 million to TWD 100 million | 15% |
Value over TWD 100 million | 20% |
Estate Tax Exemptions
Taxable estates are entitled to a TWD 13.33 million exemption, deducted from the gross value of the estate. The exemption is doubled to TWD 26.66 million if the decedent was a Taiwanese soldier, policeman, civil servant, or teacher who died in the performance of their duty.
Estate Tax Exclusions
The following items can be excluded from the valuation of the gross estate:
Property donated by the heirs to Taiwan government agencies, charitable institutions, government-owned entities, educational, cultural, or religious institutions
Art, books, or articles of cultural or historical significance (must be registered with the tax authority)
Copyrights, patented inventions, or works of art created by the decedent
Items necessary for the “daily life” of the decedent (up to TWD 100 million)
Items for “professional use” by the decedent (up to TWD 560,000)
Proceeds paid by life insurance
Property inherited by the decedent within the last 5 years (as long as the appropriate estate tax has already been paid on those items)
The property originally owned by the spouse or children of the decedent (ownership must be documented)
Unrecoverable or un-exercisable claims (supporting documentation required)
Estate Tax Deductions
Please note that these deductions apply only if:
The decedent was an ROC citizen and continuously residing in Taiwan
In the case of expense deductions, the expenses were incurred in Taiwan
Heirs did not waive their right of inheritance
Deduction Description | Amount |
Surviving spouse of decedent | TWD 5.53 million |
Each lineal descendant of the decedent | TWD 560,000 Additional TWD 560,000 for each year until the age of majority for descendants under the age of majority. |
Each parent of the decedent | TWD 1.38 million |
Spouse, descendant, or parent of the decedent with severe disability | TWD 6.93 million in addition to deductions listed above |
Each sibling and grandparent of the decedent | TWD 560,000 Additional TWD 560,000 for each year until the age of majority for siblings under the age of majority. |
Inherited crops and farmland | The entire value, as long as the land continues to be used for agricultural purposes. |
Real estate property inherited by the decedent | Varies based on how long ago the property was inherited:
Relevant property taxes must have already been paid. |
Debts, Taxes, penalties, and fines owed by the decedent before death | Full value, supporting documentation must be provided. |
Funeral expenses | TWD 1 million |
Executor or administrator expenses | Full value |
Note: as of 2023, the age of majority in Taiwan is 18.
Source: Ministry of Finance
The information in this section is current as of December 2023.
The next article "Taiwan Tax for Foreigners: Estate and Gift Tax – How to Calculate and How to File Gift Tax in Taiwan?" will provide a detailed explanation of gift tax.
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