Calculating Gift Taxes in Taiwan
Like estate taxes, gift tax in Taiwan is also calculated with a progressive system:
Value of Gift | Tax Rate |
TWD 25 million or below | 10% |
TWD 25 million to TWD 50 million | 15% |
Over TWD 50 million | 20% |
Note: if you make multiple gifts in a calendar year, the gift tax is computed on the total value of all gifts made in the same year, minus the tax due for gift tax already paid in that year.
Standard exemption for gift tax
Each individual is entitled to an annual exemption of TWD 2.44 million towards the total amount of gifts.
Source: Ministry of Finance
The information in this section is current as of November 2023.
Exclusions for gift tax
Property donated to public organizations, government-owned businesses, private educational, cultural, public welfare, charitable, or religious organizations
Living, educational, or medical expenses for the donor’s dependents, paid for by the donor
Crops and farmland (which must be continued to be used for agricultural purposes)
Gifts between spouses
Wedding gifts given by parents
Property given to a trust
Other considerations of the gift tax
Any liabilities that are transferred with the gift may be deducted from the total gift amount
How to File Estate and Gift Taxes
Common procedures between gift and estate taxes:
Gift or estate tax returns must be filed where the donor or the decedent held their household registration in Taiwan (if they were a Taiwan citizen).
In the case of non-Taiwan citizens, the return should be filed with the central tax authority.
Taxpayers may apply for a standard extension of up to three months, by submitting a written request to the relevant tax authority
Once the tax authority has assessed and verified the value of the estate or gift, a tax notice will be issued to the taxpayer. The taxpayer is expected to pay the relevant tax within two months.
Taxpayers may request an additional two month extension of the payment deadline.
If the total tax owed is greater than TWD 300,000, the taxpayer may apply (before the payment deadline) for the option to split the payment into 18 installments, with no more than two months between each installment. Interest rates will apply.
If the tax owed is greater than TWD 300,000, and the taxpayer cannot pay the tax, they can also choose to surrender the property in lieu of payment.
Estate tax
The return should be filed by the taxpayer within 6 months of the date of death.
Gift Tax
Gift tax returns should be filed by the donor within 30 days of the transfer of the gift.
If a donor has made two or more taxable gifts in the same year, the return should include all gifts and all gift tax already paid in that calendar year.
Penalties related to Taiwan Estate and Gift Taxes
Penalties for avoiding or underpaying these taxes are severe, and the Taiwan government even offers a reward to people who report tax fraud in these cases, so be absolutely sure that you are following the relevant regulations and are in full compliance.
Infraction | Penalty |
Late filing | Fines up to double the owed tax |
Unreported or under-reported tax | Fines up to double the owed tax |
Intentional, fraudulent or illicit tax evasion | Fines up 1 to 3 times the owed tax |
Distributing assets of estate or transferring gift title before tax is paid | Up to 1 year imprisonment |
Delinquency on installment payments (with exceptions) | Fines up to 1% of the tax owed for every two days of delay |
Please note that the above fines are levied in addition to the tax owed, but cannot exceed the total value of the estate or gifts in question.
For the essentials of the Taiwan Estate and Gift Tax: general principles, who pays, how much is owed, and what exemptions are available, please refer to the previous article "Taiwan Tax for Foreigners: Estate and Gift Tax – General Principles and How To Calculate Estate Tax in Taiwan?".
If you have any doubts, concerns, or questions about your estate or gift tax situation, we strongly encourage you to enlist the help of a certified tax professional. If you do not currently have a tax advisor, please feel free to contact us at Del Sol CPA and Associates, as we are more than happy to help you navigate these challenging circumstances.
In addition to general tax advice, Del Sol CPA and Associates is also a highly regarded provider of wealth planning and wealth management services. With us, you can rest assured that you are making the most out of your money, and that your loved ones will receive everything they deserve from the fruits of your life’s work. It’s never too early to start planning ahead.
The information in this section is current as of December 2023.
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