01.2023 Life Guide
The basic living expenses and tax exemption of the tax declaration are both increased
Far Eastern New Century Corporation / Ruoqi Wu
The Ministry of Finance announced that the basic living expenses for each person in 2023 will be adjusted from NTD 192000 to NTD 196000, which is applicable to the declaration of comprehensive income tax in 2022. What is the impact of the increase in the basic living expenses on the tax declaration? What are the adjustments of the tax reduction amount this year? This issue of "Legal Column" gives you a brief introduction to relevant measures and regulations.
1、 The standard of comprehensive income tax exemption, deduction and tax grade distance has been improved, and the provincial tax is more than satisfactory
In 2022, all quotas were increased by more than NTD 4000, and the Ministry of Finance estimated the national tax reduction amount of NTD 9.57 billion. For a family of four with two salaries, the applicable tax rate of comprehensive income tax is 5%~40%, which will save NTD 1900~15200, and single workers can save NTD 750~6000. With the table below, you can easily calculate the tax payable through two steps.
Step 1: Calculate the net amount
Net income=total annual income - tax allowance - standard deduction/itemized deduction - special deduction - (basic cost of living difference)
Step 2: Get the tax payable
Net income x tax rate - progressive difference=tax payable
project
Year 2021
(Applicable to tax declaration in May 2022)
2022
(Applicable to tax declaration in May 2023)
Allowance
commonly
NTD 88000/person
NTD 92000/person
At least 70 years old
NTD 132000/person
NTD 138000/person
Standard deduction
single
NTD 120000/person
NTD 124000/person
Having a spouse
NTD 240000/person
NTD 248000/person
Special deduction from salary
NTD 200000/person
NTD 207000/person
Special deduction for physical and mental disorders
NTD 200000/person
NTD 207000/person
Net income
tax rate
Progressive difference
NTD 0560,000
5%
0
NTD 560,0011,260,000
12%
NTD 39,200
NTD 1,260,0012,520,000
20%
NTD 140,000
NTD 2,520,0014,720,000
30%
NTD 392,000
NTD 4720001Up
40%
NTD 864,000
2、 The basic cost of living will be increased, and a family with many families will be more beneficial
In the above calculation formula of net income, the "basic cost of living difference" is mentioned, which is further explained as follows.
According to Article 4 of the Law on the Protection of the Rights of Taxpayers and Article 3 of the Implementation Rules of the same Law, the difference between the total amount of basic living expenses calculated by multiplying the amount of basic living expenses per person in the current year by the number of taxpayers, their spouses and dependent relatives in the reporting account and the total amount of tax credits and deductions that can be deducted in accordance with the provisions of the applicable tax law may be deducted from the total comprehensive income of the reporting account in the current year.
Taking a family of four as an example, the more the number of people who declare together, the higher the total basic living expenses, and the higher the deductible basic living expenses difference. Therefore, a family of more than one can declare in this way to reduce the tax payable.
Project/application example
A family of four
(Taxpayer, spouse, 2 children)
Total basic living expenses (NTD 196000 x number of applicants per person)
NTD 784000
Tax exemption (NTD 92000 per person/NTD 138000 per person over 70 years old)
NTD 368000
Standard/enumerated deduction (optional)
NTD 248000
Special deductions
Assume no special deduction
Total tax allowance and deduction
NTD 616000
Difference of basic living expenses that can be deducted from the total comprehensive income tax
NTD 784000 - 616000=NTD 16.8
3、 Pay attention to applying for support when the civil law is completed to the age of 18 under adult conditions
The increase in basic living expenses is more beneficial to taxpayers who support multiple relatives. However, it should be noted that from 2023, the civil law will lower the age of majority from 20 to 18. Therefore, if the child reaches the age of 19 in 2023 and does not meet the conditions of school attendance or lack of earning ability, the taxpayer shall not declare to support the child when handling the comprehensive income tax settlement declaration in May 2024.
Tax payment is everyone's obligation to actively master the annual quota adjustment and relevant laws and regulations, save tax intelligently for himself and his family, and enjoy the benefits of tax reduction brought by the revision of the law. (Source: Ministry of Finance)
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1、 The standard of comprehensive income tax exemption, deduction and tax grade distance has been improved, and the provincial tax is more than satisfactory
In 2022, all quotas were increased by more than NTD 4000, and the Ministry of Finance estimated the national tax reduction amount of NTD 9.57 billion. For a family of four with two salaries, the applicable tax rate of comprehensive income tax is 5%~40%, which will save NTD 1900~15200, and single workers can save NTD 750~6000. With the table below, you can easily calculate the tax payable through two steps.
Step 1: Calculate the net amount
Net income=total annual income - tax allowance - standard deduction/itemized deduction - special deduction - (basic cost of living difference)
Step 2: Get the tax payable
Net income x tax rate - progressive difference=tax payable
project
Year 2021
(Applicable to tax declaration in May 2022)
2022
(Applicable to tax declaration in May 2023)
Allowance
commonly
NTD 88000/person
NTD 92000/person
At least 70 years old
NTD 132000/person
NTD 138000/person
Standard deduction
single
NTD 120000/person
NTD 124000/person
Having a spouse
NTD 240000/person
NTD 248000/person
Special deduction from salary
NTD 200000/person
NTD 207000/person
Special deduction for physical and mental disorders
NTD 200000/person
NTD 207000/person
Net income
tax rate
Progressive difference
NTD 0560,000
5%
0
NTD 560,0011,260,000
12%
NTD 39,200
NTD 1,260,0012,520,000
20%
NTD 140,000
NTD 2,520,0014,720,000
30%
NTD 392,000
NTD 4720001Up
40%
NTD 864,000
2、 The basic cost of living will be increased, and a family with many families will be more beneficial
In the above calculation formula of net income, the "basic cost of living difference" is mentioned, which is further explained as follows.
According to Article 4 of the Law on the Protection of the Rights of Taxpayers and Article 3 of the Implementation Rules of the same Law, the difference between the total amount of basic living expenses calculated by multiplying the amount of basic living expenses per person in the current year by the number of taxpayers, their spouses and dependent relatives in the reporting account and the total amount of tax credits and deductions that can be deducted in accordance with the provisions of the applicable tax law may be deducted from the total comprehensive income of the reporting account in the current year.
Taking a family of four as an example, the more the number of people who declare together, the higher the total basic living expenses, and the higher the deductible basic living expenses difference. Therefore, a family of more than one can declare in this way to reduce the tax payable.
Project/application example
A family of four
(Taxpayer, spouse, 2 children)
Total basic living expenses (NTD 196000 x number of applicants per person)
NTD 784000
Tax exemption (NTD 92000 per person/NTD 138000 per person over 70 years old)
NTD 368000
Standard/enumerated deduction (optional)
NTD 248000
Special deductions
Assume no special deduction
Total tax allowance and deduction
NTD 616000
Difference of basic living expenses that can be deducted from the total comprehensive income tax
NTD 784000 - 616000=NTD 16.8
3、 Pay attention to applying for support when the civil law is completed to the age of 18 under adult conditions
The increase in basic living expenses is more beneficial to taxpayers who support multiple relatives. However, it should be noted that from 2023, the civil law will lower the age of majority from 20 to 18. Therefore, if the child reaches the age of 19 in 2023 and does not meet the conditions of school attendance or lack of earning ability, the taxpayer shall not declare to support the child when handling the comprehensive income tax settlement declaration in May 2024.
Tax payment is everyone's obligation to actively master the annual quota adjustment and relevant laws and regulations, save tax intelligently for himself and his family, and enjoy the benefits of tax reduction brought by the revision of the law. (Source: Ministry of Finance)
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