Q: What are the regulations regarding itemized deductions for donations in Individual Income Tax filing?
A: Taxpayers, their spouses, and dependents may deduct donations made to educational, cultural, public welfare, or charitable institutions registered or approved by the competent authority. Donations to qualified public-interest trusts or designated athletes through special government accounts (with no marital or second-degree kinship) are deductible up to 20% of total income. However, donations for national defense, to the government, administrative legal persons, public museums (cultural assets), or via designated cultural/art foundations are not subject to this limit.
For non-cash donations, the deduction is calculated based on fair market value using the official guidelines. Necessary documentation includes donation receipts, purchase contracts, payment proofs, and for inherited/gifted assets, tax payment or exemption certificates.
Donations to private school endowments are deductible up to 50% of total income if not designated to a specific school, they are fully deductible. Original receipts are required for verification.
Itemized Insurance Premium Deduction in Individual Income Tax Filing (Image / Source: Ministry of Finance Facebook)
Q: What insurance premiums qualify for itemized deductions?
A: Deductible insurance includes personal insurance (life, health, accident, annuity), labor insurance, national pension, employment insurance, occupational hazard insurance, military/public/teacher insurance, farmer health/occupational insurance, student accident insurance, and National Health Insurance. Except for NHI (fully deductible), other types are limited to NT$24,000 per person annually. Original receipts must be attached for foreign policies, receipts and copies of the policy from approved insurers are required.
Q: What documents are required to deduct medical and maternity expenses?
A: Only expenses paid to public hospitals, NHI-contracted hospitals/clinics, or MOF-approved private hospitals are deductible. Original receipts addressed to the taxpayer must be attached. Expenses reimbursed by insurance are not deductible. Overseas treatments must be from public or approved private hospitals, with certificates for verification.
Q: What are the regulations on deducting mortgage interest for self-use residential property?
A: Interest from home loans for self-use residences is deductible up to NT$300,000 annually per household, based on the amount exceeding the savings/investment deduction. Requirements include:
- The property must be owned by the taxpayer/spouse/dependent and located in Taiwan.
- The taxpayer or dependent must have household registration or residence at the property address (no business use or rental).
- Original proof of loan interest and supporting documents must be attached.
If the loan was refinanced, relevant proof including repayment and new loan documents is required.
For couples married during the year and filing separately, post-marriage paid interest may be deducted by either party.
Itemized Deduction of Mortgage Interest for Self-Use Residential Property in Individual Income Tax Filing (Image / Source: Ministry of Finance Facebook)
Q: What is the rule for special deductions for persons with disabilities?
A: Taxpayers, their spouses, or dependents with disability certification or severe mental illness (certified by a psychiatrist) may deduct NT$218,000 in 2024. Foreign medical certificates alone are not accepted for non-citizens.
Q: Can income tax paid abroad be credited against Taiwan&rsquos Individual Income Tax?
A: For basic income tax purposes, taxes paid abroad on income declared under Article 12(1)(1) of the Basic Income Tax Act may be credited but only up to the amount of additional basic tax incurred by including that foreign income. Proof must be provided via tax receipts and relevant documentation from the foreign tax authority.
Taxes paid abroad on Taiwan-sourced income are not creditable under Taiwan&rsquos Income Tax Act.
