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The applicable deductions for a resident of the ROC in filing his income tax return of 2006
The applicable deductions for a resident of the ROC in filing his or her income tax return of 2008
Residents of the Republic of China are entitled to have the following exemptions and deductions..
（ 1 ）
Exemption: There is an NT$77,000 exemption for each taxpayer, spouse and dependent. In the case that the taxpayer, his/ her spouse or their lineal ascendants have attained seventy years of age, the exemption will be NT$115,500. The dependents must be:
a ）
Lineal ascendants of the taxpayer or his or her spouse having attained sixty years of age, or be incapable of earning a livelihood and have been supported by the taxpayer.
b ）
Children of the taxpayer under twenty years of age, or although having attained twenty years of age, who are supported by the taxpayer by reason of school attendance or by reason of physical or mental disability incapable of earning a livelihood.
c ）
Brothers and sisters of the taxpayer or his or her spouse under twenty years of age, or although having attained twenty years of age, who are supported by the taxpayer by reason of school attendance, or by reason of physical or mental disability incapable of earning a livelihood.
d ）
Other relatives or members of the family of the taxpayer within the meaning of Sub-Paragraph 4, Article 1114, or Paragraph 3, Article 1123, of the Civil Code under twenty years of age or having attained sixty years of age who are incapable of earning a livelihood, live together with and depend on the taxpayer.
However, the dependents of c) and d) shall not be listed as those deductible if their father or mother belongs to the categories eligible for tax exemption according to Categories (1) or (2) of Article 10.
To claim exemption for the spouse or the dependent (excluding other dependents, i.e., uncle, cousin, grandchild and nephew) who does not join the taxpayer in the ROC, the household materials or the official certificates of the dependent should be submitted.
（ 2 ）
Deductions: A taxpayer may select either the “Standard Deduction” or “Itemized Deductions” and may, in addition thereto, declare special deductions:
A.
Standard Deduction: There is an NT$73,000 deduction for a single person and an NT$146,000 deduction for a married couple filing a joint return (even if only one had income.)
B.
Itemized Deductions: Original receipts for a) to e) deductions below must be attached.
a ）
Donation: Donation made to officially registered educational, cultural, public welfare and charitable organization or agencies is deductible. The deduction should not be more than 20 percent of the taxpayer's consolidated gross income. However, donation made to national defense, for troop cheering, to the government or for the maintenance and repair of antiquities, historic constructions under Article 31-1 of the Cultural Assets Preservation Law is fully deductible. The taxpayer should prepare to provide evidence of official registration.
b ）
Insurance Premiums: Premiums paid for life insurance, labor insurance, national annuity insurance,employment insurance and insurance for military personnel, public functionaries and teachers, of the taxpayer, his or her spouse and their lineal dependents filing jointly are deductible. However, the deductions, excluding those for national health insurance, shall not exceed NT$24,000 for each person per year; premiums paid for national health insurance are fully deductible.
c ）
Medical and Maternity Expenses: Medical and Maternity Expenses incurred by the taxpayer, his or her spouse, and their dependents filing jointly and supported by the taxpayer are deductible, provided that the payment so made is limited to public hospitals, specially contracted hospitals or clinics for national health insurance, or those hospitals having complete and correct accounting records as recognized by the Ministry of Finance. However, no deduction shall be allowed for the portion covered by insurance payments. Claims for deductions of fees paid to foreign hospitals must be supported by evidence of the officially registered status of the hospital concerned.
d ）
Losses from Disasters: Losses from Disasters or force majeure inflicted on the taxpayer, his or her spouse and their dependents filing jointly are deductible. However, no deduction may be made for the portion of losses where insurance benefits, or relief has been received. To claim a deduction, the taxpayer should apply to the tax authorities for an investigator to appraise the losses within 15 days after the occurrence of the disaster.
e ）
Mortgage Interest Paid on a Loan for an Owner-Occupied Dwelling: Taxpayers borrowing money from a financial organization to purchase a house or other property in the ROC for use as an owner- occupied dwelling may deduct the interest paid on the loan from the gross income on one filing unit per year up to a limit of NT$300,000. Such a deduction is limited to one house or other property only. However, if the taxpayer also claims a Special Deduction for Savings & Investment, the special deduction should be subtracted from the abovementioned interest.
f ）
Rental Expense: Rent for housing in the ROC paid by a taxpayer, his or her spouse, and their lineal dependents filing jointly and used as their own residence rather than for business or performing professional services, may be deducted from their consolidated income up to and within a limit of not more than NT$120,000; however, no deduction can be claimed if he or she also claims the Deduction for “Mortgage Interest Paid on a Loan for an Owner-Occupied Dwelling”. To deduct the Rental Expense, the following documents must be attached:
i.
Copy of lease contract and payment receipt (such as receipt from landlord, ATM receipt or remittance paper).
ii.
The certificate of a family member who has registered his or her residence in the dwelling for the year, or the taxpayer's written statement to state that the house is for living only.
C.
Special Deductions:
a ）
Property Transaction Losses: Losses from property transactions may be deducted from the gains from property transactions for the same year. However, losses caused from the sale of land or securities are not deductible. If the deductible amount exceeds the gains, the difference may be carried forward for up to three years.
b ）
Special Deduction for Salary or Wages:Each person receiving salary may claim a deduction for his or her salary only up to a maximum of NT$100,000. One may fully claim a deduction of the amount of ones salary if it is less than NT$100,000.
c ）
Special Deduction for Savings and Investment: Interest derived from deposits made in financial institutions and profits accrued from trust funds with the nature of savings, as well as dividends occurred from the transaction, gift or inheritance of the tax-deferred stocks which is divided before Dec. 31, 1998 received by a taxpayer, his or her spouse and the dependents filing jointly listed in his or her gross income return for taxation may exempt from income tax in full, if the total amount of such income for the whole year does not exceed NT$270,000. If the amount exceeds NT$270,000, the deduction shall be limited to NT$270,000. However, interests accrued from postal passbook savings, governmental bonds, corporate bonds and financial bonds, and short-term commercial papers and beneficiary securities or asset-based securities issued according to the Financial Asset Securitization Act and the Real Estate Securitization Act shall be excluded.
d ）
Special Deduction for Disability:There is a $100,000 deduction for each taxpayer, spouse and dependent who is a mental patient or a disabled person. A copy of Disability Identification should be attached when claiming this deduction.
e ）
Special Deduction for Tuition:Taxpayer may claim a maximum deduction of NT$25,000 for each child attending the college/university (student certificate and tuition receipt should be attached when claim deduction). However, no deduction can be claim for the children who is attending an Open University, an Open Junior College, or a five-years junior college for the first three years, as well as having governmental subsidy.
If a resident of the ROC intends to depart and will not return within the same calendar year, the amounts for exemptions and standard deduction shall be calculated in proportion to the total number of days he or she has stayed in the ROC.
