As Taiwan's estate tax (遺產稅) and gift tax (贈與稅) were increased in 2017, a large number of wealthy people advanced their tax planning to achieve tax avoidance. Taiwan's National Taxation Bureau for the Northern Area, Ministry of Finance (財政部北區國稅局, "NTBN") specifically reminded the public that donees may be liable for payment of gift taxes in three specific circumstances.
According to Taiwan's Estate and Gift Tax Act (遺產及贈與稅法), the NTBN official indicated, typically, the individual who is responsible for paying the gift tax is the donor of the gift. However, the donee is liable for payment in any of the following three circumstances: (1) the donor’s whereabouts are unknown; (2) the donor fails to pay the gift tax within the prescribed time limit and does not have any property in the ROC (Taiwan) on which enforcement proceedings could be carried out; or (3) the gift tax has not been assessed by the time of the donor's death.
In addition, the NTBN official emphasized that the meaning of "does not have any property in ROC (Taiwan) on which enforcement proceedings could be carried out" refers not only to a situation where the donor in fact has no property in Taiwan, but also includes situations where the donor has property, but compulsory enforcement is prohibited with respect to such property (such property could include the living allowance for elderly people) or where the value of such property is insufficient to pay off all the tax owed.
The NTBN official also advised that even where the donee is liable for payment of the tax, the donor's liability also remains. Therefore, NTB will continue to make efforts to collect from the donor
any remaining portion of taxes owed until the gift tax has been paid.
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