New amendments to the Taiwanese Income Tax Act, that will be effective retrospectively from 1 January 2026, will reduce the tax burden and bring relief to at least 2.37m people.
The amendments that were promulgated by the President William Lai recently, will reduce the tax burden on families with children and are likely to provide tax relief of around NT$8bn ($252.86m).
According to a news report in the Taipei Times, the revised law would also allow social insurance premiums to be fully deducted as itemised deductions in the same way as National Health Insurance premiums.
Social insurance programmes — including Labour Insurance, Farmers’ Health Insurance, National Pension Insurance, and insurance schemes for military personnel, civil servants and teachers — form an integral part of Taiwan’s social security system and are generally mandatory by law, making them similar in nature to NHI.
Premiums paid for those programmes would no longer be subject to the NT$24,000 cap on itemized deductions for insurance premiums. The new provisions would take effect when taxpayers file their income tax returns for this year in May next year.
The amendments are part of the government’s efforts to address Taiwan’s declining birthrate under the Executive Yuan’s new population strategy.