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Inheritance Tax Cut Gets Approval In Taiwan

by Mary Swire, Tax-News.com, Hong Kong

12 January 2009

A government plan to cut the tax rates levied on inheritance and gifts to 10% in Taiwan has been approved by the country's lawmakers, it has emerged.

At present, inheritance and gift taxes are levied at rates of up to 50%, which has prompted many wealthy Taiwanese to shift their money offshore, particularly to low-tax Hong Kong and Singapore.

To address this, the Ministry of Finance has proposed the introduction of a uniform tax rate of 10%. In addition, the inheritance tax exemption will be increased to NTD12m (USD370,000) from the current NT7.8m, while the gift tax exemption will be raised to NTD2.2m from NTD1.1m.

Figures previously disclosed by the country's finance minister revealed that revenues from these taxes reach an average of TWD30bn (USD904m) each year.

The Taiwanese President, Ma Ying-jeou, now needs to sign the law for it to become active.

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