Taiwan: Inheritance

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Last Updated: Jan 30, 2008

Inheritance tax and law

The Global Property Guide looks at inheritance from two angles: taxation, and what inheritance laws apply to foreigners leaving property in Taiwan: what restrictions there are and whether making a will is advisable.

INHERITANCE TAX

How high are inheritance taxes in Taiwan?

INHERITANCE TAX

Inheritance and gifts are taxed in Taiwan, payable by the donor. Foreign national donors are also liable to this tax should they own property in Taiwan.

Estate Tax

Estate taxes are levied upon transfer of the estate upon death. For properties, the tax base is the market value of the property.

The following are allowed as deductions from the gross estate:

An allowance of TWD4 million (US$126,237) for the surviving spouse;
An allowance of TWD400,000 (US$12,624) for each lineal descendant or each parent of the deceased and a further deduction of TWD400,000 (US$12,220) for each year they are below 20 years of age at the time of death;
An allowance of TWD 1 million (US$31,559) for each dependent sibling of the deceased;
Half of the value of inherited agricultural land if it continues to be used for agricultural purposes, or the total value of such land if continuously used for agricultural purposes for the 5 years following inheritance;
A certain value of the property inherited by the deceased; depending on the length of ownership prior to his death

HOLDING PERIOD	6 years	7 years	8 years	9 years
DEDUCTION	20%	40%	60%	80%

Taxes, fines, and penalties incurred and unpaid by the deceased prior to death;
Debts owned by the deceased;
Debts owned by the deceased;
A maximum of TWD1 million (US$31,559) for funeral expenses;
Any necessary expenses incurred in administrating the inheritance process

Nonresidents cannot avail of 2-5 deductions above. The deductions referred to in 6-9 will apply only if these expenses are incurred in Taiwan. A standard exemption of TWD7 million (US$220,914) is also allowed. Residents are entitled to double the amount of the standard exemption or TWD14 million (US$441,829).

Inheritance tax is imposed at progressive rates, depending on the value of the estate.

ESTATE TAX RATES
TAXABLE ESTATE , TWD (US$)	TAX RATE
Up to 600,000 (US$18,936)	2%
600,001 – 1.5 million (US$47,339)	4%
1,500,001 – 3,000,000 (US$94,678)	7%
3,000,001 – 4,500,000 (US$142,016)	11%
4,500,001 – 6,000,000 (US$189,355)	15%
6,000,001 – 10,000,000 (US$315,592)	20%
10,000,001 – 15,000,000 (US$473,388)	26%
15,000,001 – 40,000,000 (US$1,262,367)	33%
40,000,001 – 100,000,000 (US$3,155,918)	41%
Over 100,000,000 (US$3,155,918)	50%

Gift Tax

Gift taxes are levied on transfer of properties to the spouse and the relatives where there is no clear indication that full payment of consideration was given in exchange for the property. The tax base for gratuitous transfer of property is the property’s market value.

A standard exemption of TWD1 million (US$31,559) is granted for each donor. The following can be deducted from the tax base: any deed tax or increment tax incurred in the donation of the property, and any liability transferred together with the gift.

The tax rates are progressive, depending on the gift’s value.

GIFT TAX RATES
TAX BASE, TWD (US$)	TAX RATE
Up to 600,000 (US$18,936)	4%
600,001 – 1,700,000 (US$53,651)	6%
1,700,001 – 2,800,000 (US$88,366)	9%
2,800,001 – 3,900,000 (US$123,081)	12%
3,900,001 – 5,000,000 (US$157,796)	16%
5,000,001 – 7,200,000 (US$227,226)	21%
7,200,001 – 14,000,000 (US$441,829)	27%
14,000,001 – 29,000,000 (US$915,216)	34%
29,000,001 – 45,000,000 (US$1,420,163)	42%
Over 45,000,000 (US$1,420,163)	50%

Taiwan - more data and information

How high is income tax on residents in Taiwan?