Tax Planning
Maximising Taiwan’s Child & Dependant Tax Breaks: Planning Strategies
Taiwan is increasing child and dependant exemptions for 2026-27. Learn what this means for your family and how to arrange your affairs to benefit under the updated Income Tax Act amendments.
By NomadicTax Research Team • 5-8 min read • August 18, 2026
## Recent Policy Change
On **June 25, 2026**, Taiwan’s Executive Yuan approved amendments to Articles 17 & 126 of the **Income Tax Act**, increasing the **exemption amount for minor (under-age) children** by **50%**, effective **January 1, 2026**. Taxpayers will see the benefit when filing the 2026 taxes in May 2027. ([mof.gov.tw](https://www.mof.gov.tw/singlehtml/384fb3077bb349ea973e7fc6f13b6974?cntId=e88b59b51f844142a21d18f43117b3bb&utm_source=openai))
Approximately **2.37 million individuals** are expected to benefit, with an estimated tax relief of **NT$8 billion**. ([mof.gov.tw](https://www.mof.gov.tw/singlehtml/384fb3077bb349ea973e7fc6f13b6974?cntId=e88b59b51f844142a21d18f43117b3bb&utm_source=openai))
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## How the Child Exemption Works Now
| Before Amendment | After Amendment (from 2026) |
|---|---|
| Fixed exemption amount for each minor child | Exemption for each minor child increased by **50%** |
| Relevant for deductions in Article 17 & 126 of the Income Tax Act | Same articles, higher amounts starting from the 2026 taxable year |
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## Planning Tips & Examples
- **Filing Strategy**: If you have under-age children, ensure your exemptions are properly claimed during the **2026 tax return season** (filed May 2027) — authorities will allow the increase retroactively from Jan 1, 2026.
- **Example**: Lin has two minor children. Previously, the exemption amount per child was “X”. In 2026-2027 return, Lin’s total exemption for both is now 1.5× per child, reducing taxable income accordingly. If taxable income falls into lower bracket, the effective tax saving can be noticeable.
- Families with multiple children should compute if increased exemption tips them into lower tax brackets.
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## Additional Related Measures to Consider
- Taiwan also updated the income tax treaty with Singapore (effective Jan 1, 2027), lowering withholding tax rates for dividends & royalties to 10%, revising permanent establishment (PE) thresholds, and implementing a 3-year transition period for tax credits. ([mof.gov.tw](https://www.mof.gov.tw/eng/singlehtml/f48d641f159a4866b1d31c0916fbcc71?cntId=ea91d6b8965c4bd5893ff57298b17bf5&utm_source=openai))
- For taxpayers using trusts or owning self-use property, new rulings on trust property self-use housing and land taxes may intersect with family planning strategies. ([mof.gov.tw](https://www.mof.gov.tw/singlehtml/384fb3077bb349ea973e7fc6f13b6974?cntId=a4c794fbf3774036bb5eb4bc523bb9e1&utm_source=openai))
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## Actionable Advice for Families & Taxpayers
1. **Update financial models for 2026**: Recalculate deductions with higher child exemptions to estimate tax savings.
2. **Verify eligibility**: Under-age means minors; ensure accurate age documentation.
3. **Plan dependent care costs**: Since child exemption increases, expenses tied to care might become relatively less impactful; shift focus accordingly.
4. **Consider claim timing**: Though exemption starts Jan 1, 2026, only claimable in 2026 tax filing. No mid-year claim needed.
5. **Keep documentation**: Birth certificates, custody/legal guardianship documents, other supporting evidence may be required by tax authorities.
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## Summary
Taiwan’s increased exemption for under-age children signals a stronger family support tax policy. When married with other recent tax treaty changes and property trust rulings, this creates powerful opportunities for taxpayers to reduce liability. Proper planning and documentation will be essential to unlock full benefits.