Single renters making less than US$20,000 per year exempt from 2025 Taiwan taxes

年收入低於 20,000 美元的單身租戶可免徵 2025 年台灣稅賦

Total tax exemptions NT$1.072 million for rental couples with no children


TAIPEI (Taiwan News) — Finance Minister Chuang Tsui-yun (莊翠雲) on Friday (Jan. 5) said that single renters who make less than US$626,000 per year (US$20,000) will be exempt from income taxes next year.

In an episode of the Liberty Times YouTube program posted on Thursday (Jan. 4), Chuang said not only has the rental expense been changed from the itemized deduction to the special deduction category, but the amount has also been increased from NT$120,000 to NT$180,000. Taking single renters as an example, those with an annual income below NT$626,000 (NT$52,166 per month) can be exempt from income tax when filing in May 2025.

Chuang said that on Dec. 19, 2023, the Legislative Yuan passed the third reading of the amendments to the Income Tax Act (所得稅法), adjusting the provisions on the special deduction for preschool children and raising the amount. Rental expenses, originally classified as an itemized deduction, have been reclassified as a special deduction so that taxpayers can use the standard deduction and the special deduction for house rent at the same time.

Chuang said that for single professionals, the total deduction for the 2024 fiscal year is NT$626,000, meaning if a person's annual income is below NT$626,000, they can be exempt from income tax. This figure is reached by combining the tax-exempt amount of NT$97,000, the standard deduction of NT$131,000, the salary income deduction of NT$218,000, and the rental deduction of NT$180,000.

Total tax exemptions for a couple with no children who rent would be NT$1.072 million, while that number would rise to NT$1.641 million for a couple with two children under the age of six. If there are three generations living under the same roof consisting of a couple, their young children, and a person over 70, total tax deductions rise to NT$2.1245 million.

According to Chuang, in 2021, 47% of residents in Taiwan, or about 3.05 million households, were exempt from paying income tax. Chuang said this is mainly because the government has implemented an income tax system optimization plan to increase deduction items and the amount of deductions.