萬國法律事務所

The Ministry of Finance (MOF) has recently announced that the new tax brackets for consolidated income tax will apply when taxpayers file income tax returns in May 2009 for their 2008 income.  This is because the consumer price index from the previous time that the brackets were adjusted in 1997 has increased more than 10%, which triggered automatic adjustment in tax brackets under the current mechanism.

The previous (current) tax brackets were such that those in the NT$ 0 - NT$ 370,000 taxable income bracket paid income tax at six percent; those in the NT$ 370,001 - NT$ 990,000 paid 13 percent; those in the NT$ 990,001 - NT$ 1.98 million paid 21 percent; those in the NT$ 1.98 million - NT$ 3.72 million paid 30 percent; and those with incomes greater than NT$ 3.72 million paid 40 percent.

The new tax brackets are as follow: those in the NT$ 0 - NT$410,000 bracket will pay income tax at the rate of six percent; those in the NT$ 410,001 - NT$1.09 million will pay 13 percent; those in the NT$ 1.09 million - NT$ 2.18 million will pay 21 percent; those in the NT$ 2.18 million - NT$ 4.09 million will pay 30 percent; and those with incomes in excess of NT$ 4.09 million will pay 40 percent.

As a result, coverage of the lowest 6% tax bracket will be raised to under NT$ 410,000 from NT$ 370,000 now and that of the highest 40% bracket to over NT$ 4.09 million from the current NT$ 3.72 million.

The MOF further pointed out that medium-to-low-income people who make NT$ 370,000 to NT$ 410,000 would benefit more from tax-bracket adjustment than would those in high-income brackets.