The Northern District National Taxation Bureau of the Ministry of Finance stated that in order to further implement rent-tax fairness and reduce the financial burden of renting families, Article 17 of the Income Tax Act was amended to add a new "special deduction for housing rental expenses" provision, which can effectively reduce the tax burden of renters while taking into account tax fairness.
The bureau pointed out that if the taxpayer, spouse and dependent immediate family members rent a house in Taiwan for their own residence and not for business or operation, each declaring household can report a special deduction for housing rental expenses of up to NT$180,000 (the same below) for the rent paid each year (after deducting government rental subsidies). However, if the taxpayer, spouse or dependent immediate family members own housing in my country, this deduction will not apply.
The bureau further explained that the Ministry of Finance issued an interpretation order on December 3, 2014, taking into account five special situations where the taxpayer, spouse and dependent immediate family members own houses but still need to rent houses outside. Their houses can be regarded as "non-self-owned houses" and can still apply for the special deduction for house rental expenses. The five special circumstances and the supporting documents that should be attached to the declaration are listed in the attached table.
The bureau added that taxpayers, spouses or dependent immediate family members who rent houses but do not own houses in the country should submit the following documents when reporting special deductions for house rental expenses in 2014:
1. The lease agreement of the lessee and a copy of the payment certificate of the rent (such as a receipt signed by the lessor, an ATM transfer transaction statement or a remittance certificate).
2. A certificate of completion of household registration at the leased address in 2014, or a written affidavit from the taxpayer stating that the leased house is for self-residence and not for business or operation in 2014.
The Bureau specifically reminds that the special deduction for housing rental expenses has a "wealth exclusion clause" and does not apply to those who meet any of the following conditions:
(1) The applicable tax rate for comprehensive income tax declaration is 20% or above.
(ii) Dividend income may be taxed separately at a rate of 28%.
(3) The basic income calculated in accordance with the Basic Income Tax Act exceeds the prescribed deduction amount (NT$7.5 million for FY 2014).
If you have any questions about the above instructions, please call the free service number 0800-000321 for consultation. The Bureau will provide detailed consulting services wholeheartedly.
Contact person for press release: Mr. Qiu, Section Chief, Inheritance Tax Group, Institute of Integrated Law, Tel: (03) 3396789 ext. 1430
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