Resident taxpayers have the option to claim either a standard deduction or itemised deductions for their income tax calculation purpose. For the 2018 individual income tax return filing, these deductions are as follows.
Note that non-resident aliens are not eligible for any deductions.
The deduction for a single taxpayer is TWD120,000. A husband and wife filing a joint return are eligible for a standard deduction of TWD240,000.
Itemised deductions include the following:
- Charitable contributions.
- Insurance premiums (maximum of TWD24,000 per person per annum for group insurance premium and labour insurance premium).
- Medical expenses.
- Calamity losses.
- Either interest paid on loans for the purchase of an owner-occupied house in Taiwan (maximum of TWD300,000) or rental payment (maximum of TWD120,000) for the lease of a self-use residence in Taiwan.
There is no ceiling on the aggregate of the itemised deductions.
The following special deductions are also available:
- Special deduction for losses from property transactions, which are limited to gains from such transactions (residual balance can be carried forward for three years).
- Special deduction for salaries or wages (limited to TWD200,000/person, or total salary income reported, whichever is lower).
- Special deduction for interest earned from bank deposits (limited to TWD270,000/tax filing unit, or the total reported, whichever is lower).
- Special deduction for the disabled or handicapped (TWD200,000/person).
- Special deduction for dependent child tuition (TWD25,000 per dependent child if studying in an approved college or university).
- Special deduction for pre-school children who are less than or equal to five years of age (TWD120,000 per child, which is only allowed for a taxpayer whose applicable regular income tax rate is less than 20% after deducting the said special deduction, or where the income subject to IBT is less than TWD6.7 million).
A non-resident alien is not eligible for any special deductions.
A resident alien is eligible for a personal exemption of TWD88,000. Additional exemptions of TWD88,000 each are available for the spouse and each dependant. For dependants over 70 years of age, the exemption will be TWD132,000.
A non-resident alien is not eligible for any personal exemptions.