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The Ministry of Finance has announced that, because of the inflation linkage within Taiwan's tax code, personal income tax (PIT) thresholds and brackets will be increased automatically in 2017.
As inflation has exceeded three percent since deductions and thresholds were last restructured in 2013, the PIT exemption will rise next year by TWD3,000 (USD95), from TWD85,000 to TWD88,000, with the tax exemption for those aged 70 or above, their spouses, and dependents rising by TWD4,500, from TWD127,500 to TWD132,000.
Taiwan's six PIT brackets will also be moved upwards, with more of taxpayers' income thereby being taxed at lower rates. For example, the lowest five percent tax bracket will apply to taxable incomes up to TWD540,000, a rise from the current TWD520,000.
Similarly, the next 12 percent bracket will stretch from taxable incomes of TWD540,001 to TWD1.21m (up from TWD1.17m), while the highest 45 percent bracket will cover annual incomes above TWD10.3m (up from TWD10m).
The changes are expected to cost the Government up to TWD6.8bn in lost revenue.
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