On 8 January 2024, Taiwan’s Ministry of Finance released a notice regarding the amounts of basic income eligible for an exemption from Income Basic Tax and related deductions for 2024 according to the Income Basic Tax Act on 23 November 2023. The Income Basic Tax (IBT) is a minimum tax imposed at 12% for businesses and 20% for individuals.
The MOF states that, in accordance with the Income Basic Tax Act, if the total increase of the Consumer Price Index (CPI) has reached a figure of 10% or higher compared to the index of the year of previous adjustment, the following amounts should be adjusted:
- The amount of basic income eligible for an exemption from Income Basic Tax and the amount deductible from basic income for the purpose of calculating the income basic tax of a profit-seeking enterprise.
- The amount of basic income eligible for an exemption from Income Basic Tax and the amount deductible from basic income for the purpose of calculating the income basic tax of an individual.
- The amount of insurance payment made upon the death of an insured person, which can be excluded when calculating the basic income of an individual.
As the total increase of the applicable CPI for an individual (12.18%) has met the said 10% condition, the amount of basic income exemption/deduction and that of insurance payment exclusion for an individual are now adjusted from NT$6,700,000 to NT$7,500,000 and from NT$33,300,000 to NT$37,400,000 for 2024 respectively. On the other hand, the total increase of the applicable CPI for a profit-seeking enterprise has not met the said 10% condition; the amount of basic income exemption/deduction remains NT$600,000 for 2024.
The MOF further states that those aforementioned amounts for 2024 apply to taxpayers when filing 2024 income tax returns in 2025.
