Some types of income are completely exempt and not included in income tax calculations:
Capital gains
Gains from securities transactions (after 2016)
Note: determining taxable income derived from land or property is a more complex issue and will be covered in a future installment of this series.
Aside from exempt income, a number of exemptions and deductions are applied to your gross taxable income to reach your final net taxable income. Only resident taxpayers are entitled to claim certain exemptions and deductions on their tax returns, which effectively reduces your net taxable income:
Exemptions
For the taxpayer, their spouse, and dependents or direct family ascendants appearing on the tax return, each individual is allowed NTD 92,000 exemption.
For individuals over 70 years of age, the exemption may be increased to NTD 138,000
Exemption Item | Amount |
Exemption | NTD 92,000 |
Exemption for ages over 70 years | NTD 138,000 |
If claiming exemptions for others on your tax return (spouse, dependents, ascendants, etc.) will need to provide documentation:
Relationship | Supporting Documents |
Spouse | Proof of identity Marriage certificate |
Children or siblings under 20, or full-time students, or incapable of working | Document of relationship Proof of financial support Proof of inability to work or proof of student status |
Ascendants | Proof of relationship Proof of financial support (under age 60) proof of inability to work (over age 70) proof of life |
Other dependents under 20 or over 60 | Proof of relationship Proof of financial support/relationship (over age 60) proof of inability to work |
Standard Deductions
Standard deduction vs. Itemized deduction
As a resident taxpayer, you are entitled to claim either a standardized deduction or itemized deductions. For many, especially those just getting started in Taiwan, the standard deduction is much more straightforward:
Standard Deduction Item | Amount |
Single taxpayer | NTD 124,000 |
Married (filing jointly) | NTD 248,000 |
Note: you will need to provide proof of your relationship (e.g. marriage certificate)
Itemized Deductions
These are specific expenses which can be deducted from your gross taxable income. Each deduction has its own limit. There is no fixed ceiling on the itemized deduction total, but you may be required to provide supporting documentation and must be sure to calculate and report the items correctly.
Itemized Deduction Item | Amount / Limitations | Required Documentation |
Charitable donations |
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Personal insurance premiums (e.g. life insurance, labor, health, or employment insurance) |
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Medical and maternity expenses |
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Losses from disaster |
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Interest paid on owner-occupied home loan |
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Rental expenses |
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Special Deductions
There are a number of special deductions also available for resident taxpayers in Taiwan. We will expand on these in a future installment of this series, but a brief summary is given here:
Salaries and wages
Losses from property transactions
Savings and investment
Disability
Tuition (for dependent children)
Pre-school children
Long-term care expenses
Basic Living Expense
Each year the Taiwan Tax authority calculates an estimated “Basic Living Expense” (NTD 202,000 for the 2023 tax year) which can also be treated as a deduction, but with a caveat:
Basic Living Expense | Amount |
Basic Living Expense | NTD 202,000 |
If the basic living expense (multiplied by the number of individuals listed on your tax return) exceeds the total sum of exemptions and deductions claimed, the difference can be used as an additional deduction.
Note: The information in this section is current as of December 2023. Please be aware that the amounts and limits for deductions and exemptions can vary from year to year. Always check the official NTB website or consult a licensed tax professional for accurate information.
Copyright © 2023 by Del Sol CPA Services
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