The Ministry of Finance (MOF) Wednesday announced the raising of Taiwan’s basic living expense tax deduction for 2022 to NT$196,000 (US$6,089), with some 2.3 million households set to benefit from the upward adjustment.
Taiwan’s 2017 Taxpayer Rights Protection Act stipulates that individuals should not be taxed on the amount they need to cover basic expenses, which is set at 60 percent of the median per capita disposable income from the preceding year.
It is the sixth consecutive year that the deduction for basic living expenses has been raised, and the amount for 2022 was NT$4,000 higher than it was in 2021, according to the MOF.
Under Taiwan’s existing tax system, when basic living expenses exceed a taxpayer’s personal exemption, standard deduction, and other special deductions, the difference can be applied to gross income.
The MOF estimated that 2.3 million households will benefit from the tax-deductible allowance for basic living expenses, saving NT$1.507 billion, when they file an income tax return in May next year.
Meanwhile, the MOF also provides annual inflation adjustments for some tax provisions, including personal exemption, standard deduction, and special deduction for salary, to allow people to pay less tax, which would amount to NT$11.744 billion in total.
For a family of four with two college-aged children and a gross consolidated income of NT$1.5 million, the extra NT$16,000 cushion provided by the higher basic living expense standard and the inflation-adjusted exemption and deductions would generate a combined saving of NT$1,500.

Source: Focus Taiwan News Channel