Ministry of Finance Unveils Major Tax Reform Bill

On 1 September 2017 Taiwan’s Ministry of Finance (MOF) revealed a major tax reform bill that includes an increase in three types of Individual Income Tax Deductions. The deductions targeted for increase are the Standard Deduction by 22%, the Special Deduction of Income from Salaries/Wages by 41%, and the Special Deduction for Physically or Mentally Challenged Persons by 41%. The maximum tax rate for Individual Income Tax would also be reduced from 45% to 40%.

The rate for the Enterprise Income Tax for Undistributed Surplus Earnings would also be reduced from 10% to 5%. However, the tax rate for the Enterprise Income Tax would be increased from 17% to 20%.

The MOF advises that the estimated loss of tax revenue would be approximately seven billion NTD, which is acceptable. Also, more than five million taxpayers would benefit from the Tax Reform Bill, which also reflects the determination of government to bring about meaningful tax reform.
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