This year (114), when declaring personal comprehensive income tax for the 114th year, there are new revised regulations on special deductions! On January 3, 2014, the revised Article 17 of the Income Tax Act stipulates that starting from January 1, 2014, the special deduction for preschool children will be adjusted to the taxpayer's children under the age of 6. The first child will deduct NT$150,000 per year, and the second and subsequent children will deduct NT$225,000 per year. In addition, taxpayers, their spouses, and dependent immediate family members who rent housing in the Republic of China for their own residence and not for business or operation can enjoy a special deduction for housing rental expenses of up to NT$180,000 per year, excluding government subsidies, for each deductible household. However, if the taxpayer, his/her spouse, or dependent direct relatives own houses within the territory of the Republic of China, no deduction is allowed.
The Kaohsiung National Taxation Bureau of the Ministry of Finance has compiled the following table to explain the changes in the special deductions and wealth exclusion clauses for fiscal years 2013 and 2014:
| Special deductions | 112th year | 113th year | The revised and promulgated clause on the exclusion of the rich was published on January 3, 2014 (detailed notes) |
| Preschool | ◆The taxpayer must be a child under 5 years old. ◆120,000 yuan will be deducted from each person each year. | ◆The taxpayer must be a child under 6 years old. ◆The first place will be deducted 150,000 yuan. ◆The second person and above will each deduct 225,000 yuan per year. | none |
| Long-term care | ◆Limited to the taxpayer himself, his spouse or dependent relatives. ◆Persons with physical or mental disabilities who meet the requirements of long-term care as announced by the Ministry of Health and Welfare. ◆120,000 yuan will be deducted from each person each year. | Same as 2013 (no revision) | have |
| Housing rental expenses | none | ◆The taxpayer, spouse, and dependent immediate family members rent housing within the Republic of China. ◆For self-residence and not for business or operation. ◆The annual deduction for each household is limited to 180,000 yuan. ◆However, the taxpayer, spouse, or dependent immediate family members who own houses in the Republic of China are not eligible for deduction. | have |
| Note: The exclusion clause means that the special deduction for long-term care and housing rental expenses shall not be applied to any of the following circumstances: 1. After deducting the special deduction for long-term care and the special deduction for housing rental expenses, the applicable tax rate is above 20%. 2. The total amount of dividends and profits of the declaring household shall be calculated separately at a tax rate of 28% to calculate the taxable amount. 3. The basic income calculated in accordance with the Basic Income Tax Act exceeds the deduction amount prescribed in Article 13 of the same Act. | |||
The bureau reminds that the declaration of special deductions must meet the applicable conditions to avoid being assessed additional taxes by the IRS in the future. If you have any questions about the applicability of relevant laws, you can call the toll-free service number 0800-000-321 for inquiries, or go to the bureau’s website (https://www.ntbk.gov.tw) and use the National Taxation Bureau’s smart customer service “National Taxation Assistant” for online inquiries.
Provided by: Fengshan Branch
Contact Person: Section Chief Zhu Suming Contact Number: (07) 740-4001 ext. 5810
Written by: Zhang Hongren Contact: (07) 740-4001 ext. 5824
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