Taiwan

Resident taxpayers have the option to claim either a standard deduction or itemised deductions for their income tax calculation purpose. For the 2024 IIT return filing, these deductions are as follows.

Note that non-resident aliens are not eligible for any deductions.

Standard deduction

The deduction for a single taxpayer is TWD 131,000. A husband and wife filing a joint return are eligible for a standard deduction of TWD 262,000.

Itemised deductions

Itemised deductions include the following:

• Charitable contributions.
• Insurance premiums (maximum of TWD 24,000 per person per annum for group insurance premium and labour insurance premium).
• Medical expenses.
• Calamity losses.
• Interest paid on loans for the purchase of an owner-occupied house in Taiwan (maximum of TWD 300,000 after subtracting the special deduction for interest earned from bank deposits).

There is no ceiling on the aggregate of the itemised deductions.

Special 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 interest earned from bank deposits (limited to TWD 270,000/tax filing unit, or the total reported, whichever is lower).
• Special deduction for the disabled or handicapped (TWD 218,000/person).
• Special deduction for dependent child tuition (TWD 25,000 per dependent child if studying in an approved college or university).
• Special deduction for pre-school children who are less than or equal to six years of age (TWD 150,000 per child or TWD 225,000 for each child after the second child).
• Special deduction for salaries or wages may be elected to use either: (i) fixed salary deduction (limited to TWD 218,000/person or total salary income reported, whichever is lower) or (ii) specific expense deduction to calculate taxable salary income, whichever is more beneficial. Under the specific expense deduction regime, three prescribed expense categories can be deducted from salary income. The prescribed expense items shall be incurred directly in relation to the provision of services by the individual and should be actually borne by the income recipient. The specific expense deduction is limited to 3% of total salary income for each expense category per person per year. The three prescribed expense categories are listed as follows:
  • Occupational clothing expense: Expenses incurred for special clothing items or performance dedicated clothing required for one’s occupation, including purchase cost, rental expense, cleaning fee, and maintenance expense.
  • Training expense: Expenses incurred for participating in training courses covering specific skills or expertise delivered by qualified institutions associated with current occupation or work, or required by law.
  • Occupational tool expense: Expenses incurred for purchasing books, periodicals, or other tools that are solely used for one’s occupation. If the useful life of the aforementioned items exceed two years, and the expense incurred exceeds a certain amount, the purchase amount shall be depreciated or amortised annually.
• Special deduction for long-term care (TWD 120,000 per person, which is only allowed for a taxpayer whose applicable regular income tax rate is less than 20% after deducting the said special deduction, does not use the 28% tax rate for dividend income, and where the income subject to IBT is less than TWD 7.5 million).
• Rental payment deduction (maximum of TWD 180,000) for the lease of a self-use residence in Taiwan, which is only allowed for a taxpayer whose applicable regular income tax rate is less than 20% after deducting the said special deduction, does not use the 28% tax rate for dividend income, and where the income subject to IBT is less than TWD 7.5 million.

A non-resident alien is not eligible for any special deductions.

Personal exemptions

A resident alien is eligible for a personal exemption of TWD 97,000. Additional exemptions of TWD 97,000 each are available for the spouse and each dependant. For dependants over 70 years of age, the exemption will be TWD 145,500.

A non-resident alien is not eligible for any personal exemptions.

Basic living expenses difference

The total basic living expense shall be calculated in accordance with the expenses of basic living for each person announced by the Ministry of Finance multiplied by the number of taxpayer, spouse, and dependants. If the amount of basic living expense is higher than the sum of personal exemption, standard deduction (or itemised deduction), and special deductions (not including deduction for salaries or wages), the difference can be used as an additional deduction from the gross consolidated income.

For tax year 2024, the basic living expenses is TWD 210,000 per person.