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Taiwan Individual Income Tax Q&A 19

Q: What are the requirements for declaring the difference on basic living expenses in Taiwan individual income tax?
A: “Basic living expenses” refers to the expenses on maintaining a basic living with human dignity of the taxpayer, his (her) spouse and dependent(s). The expenses are based on the standard announced by the central Department of Budget, Accounting and Statistics and defined by the central competent authority as 60% of the median rate of the expenditure per person in the past year, and it shall be reviewed every 2 years.
“Difference on basic living expenses” is an amount that can be deducted in the individual income tax. The announced basic living expenses on 2020 is NT$182,000 per person, so the total amount shall be the number of the taxpayer, his (her) spouse and dependent(s) time NT$182,000. The amount exceeds after deducting the total declared allowance, general deduction, special deduction for saving and investment, special deduction for disabled, special deduction for educational tuition, special deduction for pre-school children, can be deducted from the taxpayer’s total income.

Is there any tax deduction for investment in Taiwan?
There are 2 types of deduction:
Personal investment that meets the repealed Regulations on Promoting Industrial Upgrading Article 8, original subscriptions or registered stocks issued by companies in emerging important strategic industries that have been held for more than 3 years can be deducted within the calculation limit of the prescribed deduction rate for the purchase price of the stock when filing income tax. The comprehensive income tax payable within 5 years from the current year.
Personal investment that meets the Statute for Encouragement of Private Participation in Transportation Infrastructure Projects Article 33, the original subscription or application for registered stocks issued by private institutions rewarded by the Regulations for establishment or expansion, held for more than 2 years, can obtain the stock price. Within the limit of 20%, the comprehensive income tax payable within 5 years from the current year will be deducted.
In addition, the total amount of the above two types of investment tax deductions for each year shall not exceed one-half of the taxable amount of the current year, but the final year is not subject to the restriction of one-half of the taxable amount deducted.

If either the taxpayer or his (her) spouse has a salary income, is it applicable to declare income jointly by calculating the tax payable on the salary income separately?
Yes, it is applicable.

What are the requirements on applying deduct or return of income tax payable when repurchasing self-use residential house in Taiwan?
The amount of income tax paid on property transaction income from the sale of self-use residential houses, within 2 years from the date of transfer registration completion, if the price of repurchasing self-use residential houses exceeds the original selling price, the amount can be deducted or returned from income tax payable in the year of repurchased house transfer registration. However, the amount that has been deducted in the loss of property transaction cannot be counted again. If the purchase is done before selling, it is applicable as well, but the deduction must be in the year of selling.
If the house sold is in the name of the taxpayer and the house repurchased is in the name of his (her) spouse, the deduction is still applicable, The definition of “self-use residential house” refers to the house that the taxpayer, his (her) spouse, the dependent(s) register their household in this address and did not rent or use it as business purpose in a year before selling.

What is the conversion rate between New Taiwan Dollar (NTD) and Chinese Yuan Renmibi (RMB)?
The conversion rate between NTD and RMB is calculated using USD as a medium and calculated based on the annual average exchange rate of NTD to USD and RMB to USD in the Cross Strait Economic Statistics Monthly complied by the Mainland Affairs Council, R. O. C. (Taiwan).
The conversion rate between NTD and RMB in 2019 is 4.4678 to 1.