New Measures for the Declaration of Individual Income Tax of 2017
National Taxation Bureau of Kaohsiung, Ministry of Finance expressed that, while 2017 comes to an end and people are now preparing for the brand new year, people shall also pay attention to new measures for the declaration of individual income tax of 2017 and adjustment to the personal exemption thereof, as it will facilitate their tax declaration next year. The Bureau has summarized relevant information as follows:
Person or their lineal dependents who is above 70 years old
Income from lease of property
Those who lease a property according to Article 15 and 23 of Housing Act
The exemption for the monthly rent of each property shall not exceed NT$10,000.
Basic living expense
Article 4 of Taxpayer Rights Protection Act
The expense that taxpayers pay for maintaining their basic living in accordance with human dignity for themselves and their dependents shall not be taxed.
Declaration of individual income tax return
According to Paragraph 8 of Article 7 of Taxpayer Rights Protection Act
Matters that shall be disclosed shall have the facts and amount filled in “Declaration of Consolidated Income Tax Return” and is submitted tax related documents.
The Bureau explains that, when declaring the 2017 individual income tax in May next year (2018), taxpayers may deduct part of the total of their “basic living expense” that exceeds the exemption amount prescribed in the Income Tax Act, deduction of either the "Standard Deduction" or "Itemized Deductions", and special deduction of income from salary from the individual income tax. If the basic living expense per person is NT$160,000 for the year of 2017, the basic living expense for a household of five (the taxpayer, spouse, two minor children and one lineal dependent under 70 years old) is NT$800,000 (NT$160,000 * 5) for the year. When declaring the individual income tax of 2017, the taxpayer may not only deduct a total of NT$748,000 from the basic living expense (NT$440,000 i.e. NT$88,000 * 5), standard deduction (NT$180,000) and special deduction of income from salary (NT$128,000), but also deduct the difference of basic living expense (NT$52,000 i.e. NT$800,000 minus NT$748,000). In other word, the household’s basic living expenses (NT$800,000) can be entirely deducted before calculating the payable tax.
The Bureau further explained that, for taxpayers who lease the property to persons receiving rental subsidies from the competent authority as prescribed in Article 15 of Housing Act or to those who comply with Article 23 of the same Act, their rent income during the lease period shall be exempt from income tax. However, the amount of rent income exempted from income tax shall not exceed NT$10,000 per house each month. If it’s exceeded, the exemption amount of each leased property shall be limited to NT$10,000 at maximum. For example, if a property is leased from January to December of 2017 according to Article 15 of Housing Act with a monthly rent of NT$15,000, the yearly rental income will be NT$180,000. After deducted the exemption amount of NT$120,000, the taxpayer shall declare the rental income at NT$60,000.
The Bureau also emphasizes that, in case of having any questions regarding the declaration of 2017 indivudual income tax, citizens can call the free service hotline (0800-000321) for more information.
Contact: Mrs. Chang, Revenue Officer of the Second Examination Division