Q: What types of income are included in total comprehensive income?
A: Comprehensive income includes profit-seeking income, professional practice income, salary income, interest income, rental income, royalty income, income from self-operated farming, fishing, animal husbandry, forestry, and mining, property transaction income, competition prizes or lottery winnings, retirement income, and other income. The total comprehensive income is the sum of all these types of income earned by the taxpayer, spouse, and declared dependents throughout the year.
Q: What is profit-seeking income?
A: It includes dividends distributed to shareholders of companies, surplus distributed to members of cooperatives, surplus distributed to investors of other legal entities, profits allocated to partners in partnerships, profits derived by sole proprietors from their businesses, and occasional trade profits earned by individuals.
Q: What is professional practice income?
A: It refers to income derived by lawyers, accountants, architects, physicians, pharmacists, midwives, medical technologists, programmers, actuaries, real estate appraisers, physical therapists, occupational therapists, dietitians, psychologists, dental technicians, speech therapists, land administration agents, bookkeepers, authors, agents, document processors, performers, pilots, program producers, trademark agents, patent attorneys, patent agents, arbitrators, tax preparers, painters, printmakers, fortune tellers, artisans, art craftsmen, public safety inspectors, private notaries, and other self-employed skilled professionals. The income is calculated by deducting all related business expenses or costs from their business or performance revenue.
According to the Labor Pension Act, voluntarily contributed pensions within 6% of monthly professional practice income are exempt from taxation for the year contributed.
Q: What is salary income?
A: Salary income refers to all income received from employment or job positions, including wages, salaries, pay, allowances, annual bonuses, dividends, subsidies, and other compensation. However, for individuals not residing in the Republic of China (Taiwan) and staying within Taiwan for no more than 90 days in a tax year, remuneration received from foreign employers for services performed is excluded.
Salary income refers to all types of income received from positions or employment. (Image / Source: freepik)
For taxpayers, spouses, or dependents who have salary income, they may deduct either the special salary deduction or necessary expenses. The remaining balance is considered salary income:
(1) Special Salary Deduction: NT$218,000 per person. If annual salary income does not reach NT$218,000, the full amount of the salary income can be deducted.
(2) Necessary Expenses: Limited to work-related expenses such as professional attire, continuing education, and occupational tools, with submission of a personal salary expense declaration form, receipts, and supporting documents required.
Foreign special professionals meeting Article 20 of the Act for the Recruitment and Employment of Foreign Professionals and its related regulations may, for five years starting from the first tax year in which they stay in Taiwan for 183 days or more and earn over NT$3 million in salary, exclude 50% of the portion exceeding NT$3 million from their comprehensive income, and their overseas income is also exempt from basic income tax. The application form and related supporting documents must be submitted when filing.
Q: What is interest income?
A: Interest income includes interest from government bonds (issued by various levels of government), treasury bills, securities, financial bonds, all types of short-term notes, bank deposits (including special preferential deposits for retired public servants and military personnel), and other lending funds. In addition, prize winnings from lottery savings bonds exceeding the principal are also considered deposit interest.
However, under the Postal Remittances and Savings Act, interest from Chunghwa Post passbook deposits is tax-exempt.
Furthermore, interest income from the portion exceeding the issue price of short-term notes upon maturity, interest distributed from beneficiary securities or asset-backed securities issued under the Financial Asset Securitization Act or the Real Estate Securitization Act, and interest income from government bonds, corporate bonds, and financial bonds, as well as interest income from repurchase agreements involving these securities or notes, are not included in comprehensive income, and any withholding tax paid cannot be credited or refunded.
