Unknowable tax matters of 2024

        2025 is approaching, and I believe every taxpayer is curious about what tax system changes will occur in the new year? The tax regulations recently released by the 'Legal Column' reorganization allow you to plan your finances early and save money.

        1、 Special deduction for preschool children

        Expand the applicable age of the "Special Deduction for Preschool Children" from under 5 years old to under 6 years old; In addition, the deduction amount has been increased from NTD 120000 to NTD 150000 for the first child supported by each household under the age of 6; The second and above children each have NTD225000.

        2、 Special deduction for housing rental expenses

        The "housing rental expenses" item has been changed from the "listed deduction amount" item to the "special deduction amount" item, and the maximum deduction amount has been raised from NTD 1.2 million to NTD 1.8 million. However, please note that the following four types of taxpayers cannot declare deductions even if they have not declared the interest on the purchase loan and comply with the regulations of renting the house for personal use rather than for business or operational purposes.

        The first category: taxpayers, spouses, or direct relatives who have houses in Taiwan.

        Category 2: Those subject to a tax rate of 20% or higher.

        Category 3: Dividends are taxed separately at a tax rate of 28%.

        The fourth category: objects subject to a basic tax rate of 20%.

        3、 Tax exemption threshold for the three major ethnic groups

        The Ministry of Finance announced in August this year that the comprehensive income tax exemption threshold adjustment plan for 2025 is expected to benefit the following three major groups.

        1. Single renters: Annual income below NTD 62600 is exempt from tax. (including tax exemption of NTD 97000, standard deduction of NTD 131000, salary income deduction of NTD 218000, and rent deduction of NTD 180000)

        2. Double income families (without children): Annual income below NTD1072000 is exempt from tax.

        3. Families of four (with two children under the age of 6): Annual income below NTD 1641000 is exempt from tax.

        The above-mentioned applicable objects and tax-free amounts still need to be subject to the announcement of the Ministry of Finance at the end of the year.

        4、 Optimize the online tax reporting process

                In terms of optimizing the comprehensive income tax online declaration measures, by 2025, the public can confirm various detailed information through the "Query Data Tax Estimation Table". When using a mobile phone to file taxes, after performing identity verification, the two steps of filling in information and confirming tax amount (checking the total comprehensive income, tax exemption amount, deduction amount, etc.) can be omitted, and the process of paying tax refunds and displaying the declaration results can be directly entered, simplifying the five steps to three and completing the declaration more quickly.

        5、 Buying household appliances can also save taxes

        As the end of the year approaches, many families have a need to replace old appliances with new ones. In order to encourage the use of energy-saving appliances, anyone who purchases a new refrigerator, new air cooler (heater), or new dehumidifier with energy efficiency level 1 or 2 approved by the Ministry of Economic Affairs before June 14, 2025 can apply for a refund and reduction of goods tax online through the Ministry of Finance's "Tax Entrance Network". When applying, it is necessary to upload a unified invoice or receipt (cloud invoice and electronic invoice proof copy are exempt from inspection), the cover of the tax refund account passbook, the guarantee letter or warranty card of the electrical appliance.

        It is worth noting that the above three attachments should be merged into one (up to two) file upload, with a total file size of no more than 8MB, and must be applied for within 6 months from the transaction date recorded on the purchase invoice or receipt. Applications cannot be made after the deadline. For detailed procedures, please refer to the tax portal of the Ministry of Finance (【 Tax Information 】 → 【 Refund of Reduced Goods Tax for Purchasing Energy saving Electrical Appliances 】 → 【 Consumer Online Application 】) (Reference: Ministry of Finance)

        *Image source: freepik

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