The new tax and social welfare system will be implemented in 2026

        Faced with the pressure and challenges brought by inflation and declining birth rates, Taiwan has implemented multiple tax reduction systems and social welfare enhancement policies since 2026. This issue of the "Legal Column" uses the simplest way to assist you in quickly grasping your own rights.

        1、 Tax system adjustment feels more profound: precise tax reduction and tax rate range adjustment

                In response to changes in the price index, there will be significant adjustments to the income tax system in 2026. The focus of the amendment is to increase multiple deduction amounts and relax tax rate brackets, which is expected to effectively alleviate the tax pressure on colleagues.

        1. Tax exemption: The personal tax exemption has been increased from NTD 97000 to NTD 101000 (for taxpayers over 70 years old, it has been increased to NTD 155000).

        2. Standard deduction amount: Single individuals will have their NTD increased from 131000 to 136000; The number of married individuals has increased from NTD 262000 to NTD 272000.

        3. Salary and disability special deduction amount: increased from NTD 218000 to NTD 227000.

        4. Special deduction for long-term care: from NTD 120000 per person, significantly increased to NTD 180000, and retroactively effective from January 1, 2025, applicable for tax reporting in May 2026.

        5. Relaxation of tax rate brackets: The tax rate threshold for the first level of 5% has been raised from NTD 590000 to NTD 610000, while the tax rate threshold for the highest level of 40% has been raised to NTD 5.19 million or more.

        2、 Social welfare further upgraded: affordable birth, good living conditions, and guaranteed quality of life

        Starting from 2026, Taiwan will strengthen various subsidies to cope with the test of declining birth rates, and provide more substantial support specifically for newlywed and parenting families to alleviate the care and housing pressure on the younger generation.

        1. Increased maternity allowance: Combined with existing labor insurance benefits and government differential subsidies, a total of NTD 100000 can be received per child.

        2. Additional subsidies for in vitro fertilization: For women under the age of 39 who apply for infertility treatment for the first time, the maximum subsidy is NTD 150000. For the second and third treatment courses of each fetus, the maximum subsidy is NTD 100000; For first-time applicants aged 39 to 45, the maximum subsidy is NTD 130000. For the second and third treatment courses of each fetus, the maximum subsidy is NTD 80000.

        3. Rent subsidy increase: For newlywed families, the subsidy amount will increase by 50% within 2 years, and an additional 50% for each child. However, in order to guide the rental housing market towards safety and legality, starting from 2026, "new applicants" must lease a "legal residence". Buildings with a top floor, illegal constructions, or unregistered structures will not be eligible for application.

        Recently, new tax reduction and subsidy systems have been implemented one after another. Colleagues may take this opportunity to review their own and their family's financial and tax plans, make good use of policy dividends, and ensure the maximization of personal rights.

        ※ Reference materials: Ministry of Finance, Ministry of Interior, Ministry of Health and Welfare

        Image source: freepik

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