Inheritance tax and inheritance law in Taiwan

This content is archived and no longer updated.

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.


How high are inheritance taxes in Taiwan?

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 is levied at a flat rate of 10% 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:

  1. An allowance of TWD4.45 million (US$148,333) for the surviving spouse;
  2. An allowance of TWD450,000 (US$15,000) for each lineal descendant or each parent of the deceased and a further deduction of TWD450,000 (US$15,000) for each year they are below 20 years of age at the time of death;
  3. An allowance of TWD1.11 million (US$37,000) for each parent of the deceased;
  4. An additional deduction of TWD5.57 million (US$185,667) per person if the spouse, a lineal descendant, or parent is handicapped
  5. A deduction of TWD450,000 (US$15,000) for each dependent brother, sister, grandparent or decedent; an additional deduction of TWD450,000 (US$15,000) for each dependent brother and sister for each year starting from his/her current year up to the age of 20
  6. The total value of the 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
  7. A certain value of the property inherited by the deceased; depending on the length of ownership prior to his death
  8. HOLDING PERIOD 6 years 7 years 8 years 9 years
    DEDUCTION 20% 40% 60% 80%

  9. Taxes, fines, and penalties incurred and unpaid by the deceased prior to death;
  10. Debts owned by the deceased;
  11. A maximum of TWD1 million (US$33,333) for funeral expenses;
  12. Any necessary expenses incurred in administrating the inheritance process

Deductions 1-7 do not apply if the deceased was not a Taiwanese citizen or was not regularly domiciled in Taiwan even though he is a Taiwanese citizen. Deductions 1-5 do not apply to heirs who waive the right of inheritance. Deductions 8-11 apply only to expenses incurred in Taiwan.

A standard exemption of TWD2.2 million (US$73,333) is granted annually 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.


Gift tax is levied at 10% 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 TWD2.2 million (US$68,750) is granted annually 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.


What inheritance laws apply in Taiwan?

Inheritance cases involving foreign nationals are governed by ´The Act Governing Choice of Applicable Law Regarding Civil Matters.´

This act provides that the law applicable to inheritance cases, is the law of the country where the decedent was a citizen of at the time of his/her death: However there are 4 possible exceptions to this general rule:

  • If a Taiwanese citizen becomes an heir according to Taiwan´s Civil Code, then he/she may inherit assets located in Taiwan.
  • If no heirs are eligible to inherit the decedent´s assets located in Taiwan, then those assets are accrued to the Treasury.
  • If the law of the country where the decedent was a citizen of at the time of his/her death refers back to the application of Taiwan law (e.g. in the case of "renvoi") then the law of Taiwan applies.
  • If the application of a foreign law would lead to consequences against the public order and good morals of Taiwan, then the foreign law would not apply.

Taiwanese nationals may inherit property abroad.

An heir who is a Taiwanese citizen may inherit all of the property of a deceased foreigner, regardless of the location of that property.

According to Taiwan´s Land Act, a foreigner who inherits land located in Taiwan is subject to certain conditions :

  1. A foreigner´s inheritance in land or land rights in Taiwan is only recognized if a citizen of Taiwan may enjoy the same rights under the laws of the foreigner´s country. As of the date of this article, there are approximately 52 countries that have this reciprocal relationship with Taiwan.
  2. A foreign national may inherit the types of land listed below, but must dispose of the land to Chinese nationals within three years after completing the inheritance registration. If the land is not duly disposed of within this time, the competent Municipal or County (City) Government transfers it to the National Property Bureau for public tendering.
    • Forest lands;
    • Fisheries;
    • Hunting grounds;
    • Salt fields;
    • Land with mineral deposits;
    • Sources of water; and
    • Lands lying within fortified or military areas
    • Lands adjacent to the borders of Taiwan

  3. Due to the complicated political relationship between Taiwan and China, the "Act Governing Relations between Peoples of the Taiwan Area and the Mainland Area" applies when an heir is a citizen of China. A citizen of China may inherit assets in Taiwan, only if the aggregate value of those assets does not exceed NTD$2,000,000.

In principle, the court in the jurisdiction where the decedent was domiciled at the time of his/her death handles inheritance issues.

If the court where the decedent was domiciled is unable to adjudicate the issue or, if the decedent´s domicile is unknown, then the court closest to the decedent´s residence handles the case. (Domicile refers to a person´s true, fixed, principal, and permanent home, to which that person intends to return and remain, even though currently residing elsewhere. Residence means the place where a person actually lives). If both courts are unable to adjudicate the issue, then the court where the assets are physically located and the court where the Judicial Yuan (the highest judicial authority in Taiwan) is situated has jurisdiction over the case.

The time taken for a court to handle inheritance proceedings varies on a case-by-case basis, depending on the complexity of the issues involved.

Intestacy: the surviving spouse and other statutory heirs inherit the estate.

In the absence of a will, the surviving spouse shares the inheritance with the highest class of surviving statutory heirs in the following order:

  • Linear descendants by blood who are the nearest in relation with the decedent (for example, a child will inherit before a grandchild);
  • Parents;
  • Siblings;
  • Grandparents.

If there are several heirs of the same order, each heir usually inherits in equal shares.

Reserved portion: the statutory heirs are entitled to reserved portions, under Taiwan´s Civil Code.

  • The linear blood descendants´ reserved portion is one half of the linear descendants entitled portion, if the decedent died intestate;
  • The parents´ reserved portion is one half of the parents´ entitled portion, if the decedent died intestate;
  • The spouse´s reserved portion is one half of the spouse´s entitled portion, if the decedent died intestate;
  • The siblings´ reserved portion is one third of the siblings´ entitled portion, if the decedent died intestate; and
  • A grandparents´ reserved portion is one third of the grandparents´ entitled portion, if the decedent died intestate.

In addition,

  • When a spouse inherits concurrently with linear descendants, the spouse and the linear descendants inherit in equal amounts;
  • When a spouse inherits concurrently with parents or siblings, the entitled portion of the spouse is one-half of the estate. The parents or siblings share the other half in equal amounts;
  • When a spouse inherits concurrently with grandparents, the spouse is entitled two-thirds of the estate, and the grandparents share the remaining one-third in equal amounts; or
  • When no heirs except for the spouse exist, the spouse is entitled to the entire estate.

If an heir´s portion is less than his/her entitled reserved portion, due to a gift made in the decedent´s will to another beneficiary, then that heir may elect to receive the amount of the deficit from that beneficiary. If there are several beneficiaries under the will causing an heir to receive less than the reserved portion, deductions must be made in proportion to the value of the gifts in which they all of those beneficiaries receive.

An heir assumes all rights and obligations pertaining to the estate at the time of the decedent´s death unless he/she opts for limited inheritance or waives his inheritance altogether (usually done to avoid inheriting debts).

Two rules determine the total value of the estate:

Firstly, upon dissolution of a marriage, Taiwan law provides that a husband and wife are equally entitled to the "remainder" of any marital property (except properties acquired from inheritance, gifts, and compensation for pain and suffering) that remains after all debts incurred during the marriage are paid. Therefore, in an inheritance case, the surviving spouse receives half of the "remainder". The other half is included in the inheritable estate.

Secondly, if one of the heirs has, before the death of the decedent, received a gift of property from the decedent for the purpose of marriage, leaving the decedent´s household, or carrying on trade, the value of such gifts will be added back to the inheritable property at the time of the decedent´s death, and thus becomes part of the estate. This rule does not apply when the decedent has made a contrary declaration of intent at the time the gift is made stating that the value of the gift should not be added back to the estate upon the decedent´s death.

Notwithstanding the above, a person may freely dispose of property by executing a will as long as the provisions of the will do not violate the rules regarding reserved portions.

It is advisable for a foreign property-owner to make a local will.

Although the making of wills is not common in Taiwan, it is advisable for a foreign property-owner to make a local will, to ensure his last wishes are carried out. It is prudent to first consult a local attorney over the contents of a will, to avoid making stipulations that are unenforceable under Taiwanese law.

During probate, a will made in a foreign language would have to be translated into Chinese.

Five types of will are valid under Taiwan law

  • A holograph will is written in the testator´s own hand and signed by the testator. No witness or notary is required.
  • A notarized will is signed by the notary, two or more witnesses, and the testator after the notary has restated the testator´s testamentary wishes.
  • A sealed will is notarized and requires two or more witnesses. The testator signs on the seal of the will.
  • A "dictated" will is signed by the testator and three or more witnesses. The content of the will is written by a witness following the testator´s oral directions.
  • An oral will can be made only if the testator is in imminent danger of death, or facing circumstances that make another form of will impossible. It must be made in the presence of two or more witnesses, and documented by a transcript or audio recording.

Except in the cases of a notarized and sealed will, there is no need to engage a professional, so theoretically, the testator does not have to be physically in Taiwan to make a valid will under Taiwanese law; however, in practice, a will that is not witnessed or notarized may be challenged by disgruntled heirs on evidentiary grounds.

There are few restrictions on making gifts in Taiwan.

The property-owner should be aware of the related tax implications of making a gift during his/her lifetime. Each individual has a non-taxable gift quota of NT$1,000,000 per year. Gifts between spouses are tax-free.

By law, a successor may revoke the gift if the recipient has intentionally and wrongfully caused the death of the property-owner, or has prevented the property-owner from revoking the gift. This right of revocation must be exercised within six months from the date of when the successor gained knowledge of the wrongful act.

Under Taiwanese law, legal ownership of real property is determined by title deeds.

The owner must record his/her rights with the land office in the proper jurisdiction.

Taiwanese matrimonial property regimes apply to couples whose marriages are recognized as valid in Taiwan.

Under Taiwan´s laws, a married couple can sign a contract agreeing to either a Community Property Regime or a Separate Property Regime. In the absence of such an agreement, the couple´s property will be subject to the Statutory Regime.

  • Under the Community Property Regime, "separate property" is limited to: gifts designated by the donor as separate property, property essential to the husband or wife´s occupation, and property earmarked for exclusive personal use of the husband or wife.
  • With the exception of "separate property", all of the couple´s property and income is "common property" and owned by the couple in common. The husband or wife must have the consent of the other to dispose of common property.
  • Under the Separate Property Regime, husband and wife each retain and manage their own property as "separate property". Each has the right to exclusively manage, use, depose of and receive profits from his or her own property.
  • Under the Statutory Property Regime, property separately owned by the husband or wife prior to marriage is "premarital property", and will remain under the sole ownership and control of the respective husband or wife. Proceeds from such premarital property (such as interest or rent income) accumulated during the marriage, and all property acquired in the marriage, are "marital property", and are owned by the couple jointly.
  • Marital property in relation to inheritance is subject to the rules on "Reserved Portions"

Children are fully capable of inheriting property in Taiwan.

An unborn child who survives its birth is also considered as if he/she is already born, and is entitled to inherit under the law. Inherited property is jointly managed by the child´s parents. The parents have the right to use and collect the proceeds from such property, but may only dispose of the property in a manner that is in the child´s interests. Only the surviving parent of a minor may appoint a guardian by will. i.e., a father may, in his will, appoint a guardian for his children only if their mother is dead, and vice versa.

On January 11, 2009 the Legislative Yuan passed several amendments to the Estate and Gift Tax Act.

The amendments will become effective three days after promulgation by the president. Once the amendments take effect, the estate tax exemption will be raised to NT$12 million from the previous NT$7 million.

Furthermore, a uniform 10% tax rate will apply, regardless of the value of the taxable estate. Previously, the inheritance tax rate depended on the value of the taxable estate. It increased progressively from 2 percent for net amounts of less than NT$600,000, 4 percent for net amounts between NT$600,000 and NT$1 million, to a maximum of 50 percent for amounts exceeding NT$100 million.