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Taiwan To Reduce Income Taxes In 2013

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

07 November 2012


Taiwan’s Minister of Finance Chang Sheng-ford has disclosed that, because of the inflation linkage within Taiwan’s tax code, individual income tax thresholds and brackets will be increased automatically with effect from the tax payable in 2014, on taxpayers’ 2013 earnings.

As inflation has exceeded 3% since deductions and thresholds were last restructured three years ago, the government is expected to make changes that will entail a loss of up to TWD7bn (USD240m) in revenue.

In particular, it is predicted that the personal tax exemption will rise by TWD3,000, from TWD82,000 to TWD85,000, with the tax exemption for those aged 70 or above rising by TWD4,500, from TWD123,000 to TWD127,500. In addition, the increase in the threshold for a couple will be the greatest, increasing by TWD6,000, from the present TWD152,000 to TWD158,000.

Taiwan’s five tax brackets would also be moved upwards, with more of taxpayers’ income thereby being taxed at lower rates. For example, on the expected basis, the lowest 5% tax bracket would apply to taxable incomes up to TWD520,000, a rise from TWD500,000 currently.

Similarly, the next 12% bracket would stretch from taxable incomes from TWD520,000 to TWD1.17m (up from TWD1.13m), while the highest 40% bracket would then cover annual incomes above TWD4.38m (up from TWD4.23m).

TAGS: Finance | tax | law | Taiwan | tax thresholds | ministry of finance | legislation | tax rates | tax breaks | individual income tax

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