The Legislative Congress in Taiwan passed an amendment to article 15 of the Income Tax Act on 6 January 2015 which allows partners to calculate their income and subject themselves to individual income tax separately. The new regime retrospectively applies to income in 2014. As a result, spouses can elect for this new method of reporting their 2014 income when filing a tax return in May 2015. Prior to the amendment, spouses were mandatorily required to combine their income in a joint tax return and were therefore subject to higher taxes due to the progressive tax rates.
On 20 January 2012, the Supreme Court ruled that article 15 of the Income Tax Act violated the “Equality Principle” of article 7 of the Constitution and the article had to cease to apply from 20 January 2014. After thorough research, the Taiwan Ministry of Finance proposed to amend the article before the end of 2014 and have it passed immediately by the Legislative Yuan. However, a couple must still file a joint tax return even if they choose to divide their individual income and calculate their own tax payable. Only under certain circumstances may a couple request the Court to permit them to file tax returns separately.
