萬國法律事務所

Taiwan’s Ministry of Finance has proposed a revision of Article 15 of the Income Tax Law to the Executive Yuan after the current Income Tax Law which requires spouse’s income taxes calculated aggregately was declared by the Constitutional Court to be unconstitutional. Under the proposed amendment, each spouse will have the option of calculating each type of his/her incomes separately. The draft new provision is expected to become effective on January 1, 2014.

It is expected that under the new provision, the reduction in income tax collected will amount to NT$ 15billion. If this prediction proves to be accurate, this will be the most significant reduction of taxes in recent years. All spouses who currently calculate their income taxes jointly can benefit from the new provision, while spouses with higher incomes will benefit more.

Under the current Income Tax Law, spouses may choose either to jointly calculate all of their incomes or to separately calculate each spouse’s salary. In the future, spouses will have a third choice, i.e., to calculate all types of income separately. If the spouses choose this third option, each spouse can only declare deductions personal to himself/herself. Such deductions include personal tax exemptions, deductions for salary, deductions for disabilities, and losses from property transactions.

This new revision will be most beneficial to professionals and stock investors, as they typically have lower salaries but higher incomes from either professional practice or investments. The new revision will have less of an impact on people whose incomes are primarily derived from salaries.