Tax-deductible allowance for living expenses may be raised to NT$209,000

Taipei, Aug. 16 (CNA) The annual tax-deductible allowance for basic living expenses could be raised to NT$209,000 (US$6,471) per person for tax filers in 2025, according to the Directorate-General of Budget, Accounting and Statistics (DGBAS) on Friday.

In its presentation of the 2023 household income and expenditure survey, the DGBAS said median disposable income per capita was NT$349,000, up 3.7 percent from the previous reporting year.

Using this figure, the tax-deductible allowance for basic living expenses per person should end up at around NT$209,000 for 2024 income tax purposes, a NT$7,000 increase from NT$202,000 in 2023, the statistics agency said.

According to the Taxpayers' Rights Protection Act passed in 2017, Taiwan's government should not tax the amount individuals need for basic necessities, which is set at 60 percent of median per capita disposable income from the preceding year.

The Ministry of Finance (MOF) said the exact figure for the adjusted tax-deductible allowance for basic living expenses will be officially announced at the end of this year.

Under Taiwan's tax system, if the basic living expenses allowance exceeds the combined personal exemption, standard deduction and special deductions, the difference can be deducted from the taxpayer's gross income.

This allowance is generally used by households with children filing taxes, because for single taxpayers and couples without dependents, the basic exemption and standard deduction is usually more favorable, totaling NT$216,000 per person for the 2023 fiscal year.

Exemptions per dependent for 2023, however, were NT$92,000 per person in most cases, while the basic living expense allowance can be claimed for each person in a tax return, including dependents.