Taiwan Income Tax Brackets: 2026 Exemptions and Deductions

When filing 2025 individual income tax in May 2026 (ROC Year 114 filing season), the basic personal exemption is NT$97,000 per person, single standard deduction is NT$131,000, and special deduction for salary is NT$218,000, meaning single wage earners with annual income under NT$446,000 owe zero income tax; for tax year 2026 filed in May 2027 (ROC Year 115), cumulative CPI indexation raises the personal exemption to NT$101,000, single standard deduction to NT$136,000, and salary deduction to NT$227,000. During the May tax season, understanding net taxable income formulas, progressive difference brackets, and applicable special deductions ensures taxpayers claim eligible tax relief without calculation errors.

Reminder: Annual May tax returns cover income earned between January 1 and December 31 of the previous year. Returns filed in May 2026 apply 2025 (114) tax brackets, whereas returns filed in May 2027 apply adjusted 2026 (115) bracket figures.

1. Three-Step Income Tax Calculation Formula: From Gross to Payable Tax

Taiwan individual income tax is not calculated by multiplying annual salary directly by tax rates. Instead, exemptions and deductions are subtracted to determine "net taxable income" before applying 5 progressive tax rates ranging from 5% to 40%. The complete process follows three steps:

1. Step 1 (Net Taxable Income): Gross Consolidated Income - Exemptions - General Deductions (Standard or Itemized) - Special Deductions - Basic Living Expense Difference = Net Taxable Income
2. Step 2 (Calculated Tax Payable): Net Taxable Income × Applicable Bracket Tax Rate - Progressive Difference = Tax Payable
3. Step 3 (Actual Balance Due or Refund): Tax Payable - Withholding Taxes and Deductible Tax Credits = Net Tax Due (or Refundable)

If the household's total basic living expense threshold (NT$210,000 × number of dependents in 2025 / 114) exceeds the sum of personal exemptions, standard deductions, and qualifying special deductions (savings, disability, tuition, pre-school, long-term care, and rent), the excess difference is deducted from gross consolidated income, benefiting households supporting multiple dependents. If receiving substantial dividends or bonuses, check the Second-Generation NHI Supplementary Premium Thresholds.

2. Comparison Table: Exemptions and Deductions for Tax Years 114 and 115

Pursuant to Articles 5 and 5-1 of the Income Tax Act, when cumulative CPI increases reach 3% or more compared to the prior adjustment year, personal exemptions, standard deductions, salary/disability deductions, and income brackets adjust upwards proportionately. The table below compares applicable amounts for 114 (May 2026 filing) and 115 (May 2027 filing):

For tenants and parents, home rental costs were reclassified from itemized to special deductions, allowing standard deduction filers to simultaneously claim rent deductions up to NT$180,000. For application details, review Rental Expense Special Deduction Guide, and families raising young children can coordinate finances with Ages 0-6 Childcare Allowance Regulations.

3. Progressive Tax Brackets and Differences Table for Tax Years 114 and 115

After determining net taxable income, check the bracket table below for your marginal tax rate and progressive difference. Taiwan applies a bracketed progressive system where higher tax rates apply only to income exceeding threshold tiers; the progressive difference enables quick calculations via Net Income × Rate − Difference:

For example, if a single employee with no dependents earns NT$800,000 salary in 114 and chooses standard deductions with no other items, net taxable income is 800,000 - 97,000 - 131,000 - 218,000 = 354,000. Since NT$354,000 falls in the 5% tier (below 59 萬元), tax payable is 354,000 × 5% = 17,700.

Frequently Asked Questions

What annual income level is exempt from income tax?

For tax year 114 (filing May 2026), single wage earners with no dependents earning under NT$446,000 (exemption 97,000 + standard deduction 131,000 + salary deduction 218,000) have NT$0 net taxable income and pay zero tax. If renting an apartment qualifying for the NT$180,000 rent deduction, the zero-tax threshold reaches NT$626,000. In tax year 115 (filing May 2027), the single wage earner basic zero-tax threshold rises to NT$464,000 (464000).

Do I still need to file a tax return if I owe zero tax?

If gross consolidated income does not exceed the sum of personal exemptions and standard deductions (e.g. NT$228,000 / 228000 for single taxpayers under age 70 in 114), filing is legally not required. However, if your employer withheld tax or if you have dividend tax credits (8.5%, cap NT$80,000 / 8 萬元), you must file a return online or in person so the taxation bureau can refund excess withholding.

Does claiming a dependent aged 70 or older grant 1.5 times exemption for anyone?

No. Under Article 17 of the Income Tax Act, the 50% (1.5 times / 1.5) increased exemption (NT$145,500 in 114; NT$151,500 in 115) applies only to the taxpayer, spouse, and direct lineal ascendants (parents, grandparents, in-laws). Claiming collateral relatives aged 70+ (uncles, aunts, siblings) qualifies only for the standard personal exemption (NT$97,000 or NT$101,000).

How should I choose between standard deduction and itemized deductions?

They are mutually exclusive. If the sum of qualifying medical expenses, life insurance (cap NT$24,000 per person; NHI uncapped), home mortgage interest (cap NT$300,000 / 30 萬元 after subtracting savings deduction), and donations exceeds standard deductions (NT$131,000 single, NT$262,000 married in 114), choose itemized deductions; otherwise standard deduction is easier.

Last updated: 2026-11-01

Compiled by SOSfix from official open data for general reference; consult taxation authorities or financial institutions for specific cases.

Sources

• Laws & Regulations Database: Income Tax Act (Verified 2026-11-01): Article 5 CPI adjustment mechanism, Articles 14 and 17 net taxable income and deduction provisions.
• eTax Portal, Ministry of Finance: Income Tax Exemptions, Deductions and Tax Brackets Table (Verified 2026-11-01): Official announcements for 114 and 115 exemptions, deductions, and progressive differences.
• National Treasury Administration / Taxation Administration, MOF: Taxpayer Rights Protection Act Basic Living Expense Announcement (Verified 2026-11-01): Verification of per-person basic living expenses and baseline comparisons.