What Changed
On August 21, 2026, Taiwan’s Legislative Yuan passed amendments to the Income Tax Act, Articles 17 & 126, granting reduced tax burdens for child-rearing families.(mof.gov.tw) Key revisions include:
- Dependent minor child exemption: increased by 50%, from NT$101,000 to NT$151,500 per child.(mof.gov.tw)
- For taxpayers with children aged under 6, the dependent child exemption can now be combined (“stacked”) with the preschool special deduction. For the first child this results in combined deductions of NT$301,500, and for additional children NT$376,500.(mof.gov.tw)
- Important insurance premium deduction rules changed: insurance premiums for labour insurance, farmers’ health insurance, national pension, and military/public education insurance are no longer capped at NT$24,000 when claimed as itemized deductions.(mof.gov.tw)
Who Benefits Most
| Family Type | Key Advantage |
|---|---|
| Parents with minor children (under 18) | Much larger dependent exemption—especially impactful for multiple children. |
| Parents of children under 6 | Significant extra deduction via stacking with preschool special deduction. |
| Those paying various mandatory insurance premiums | Can now claim full amount rather than being limited—boosts deductible base. |
Actionable Tips for Tax Planning
- Check your birth dates: If your child was <6 during the taxable year, precalculate combinations—the stacking rule only applies starting from 115-year (2026 Gregorian) tax filings. (mof.gov.tw)
- Gather receipts & declarations: Ensure you have proof of insurance contributions and proper dependant relationships (birth certificates or ARC) to support the higher exemptions.
- Update tax return forms: Relevant forms (申報書表) are expected to be revised—don’t miss submitting revised forms when filing for 115th year.(mof.gov.tw)
- Evaluate whether standard versus itemized deductions: Now with expanded insurance deduction and higher exemptions, itemizing may yield greater benefit, especially for families with several eligible expenses.
- Watch effective date: The reforms take effect from January 1, 2026 (Taiwan’s 115th year), and apply when filing in May 2027 for 2026 income.(mof.gov.tw)
Example Scenarios
- Scenario A: Parents with two children, one aged 4 and the other aged 8. Previously: two dependent exemptions of NT$101,000 each = NT$202,000. Under new rules: each child gets NT$151,500; child under 6 combines with special preschool deduction (e.g. NT$150,000/225,000 depending if second child); total deduction is much larger—easily >NT$400,000.
- Scenario B: Single parent paying multiple mandatory insurance premiums totaling NT$50,000. Under old rules, deduction capped at NT$24,000. Now able to deduct full NT$50,000. This lowers taxable income significantly, especially when combined with the increased dependent exemption.
Planning Checklist
- Confirm that children are classified as dependents and under the age criteria.
- Collect all insurance premium documentation and categorize them correctly under the law.
- Consider whether combining deductions (insurance + dependent + preschool special) will move you into a lower tax bracket.
- Seek updates from National Taxation Bureau when new forms are available, possibly early 2027.
These reforms reflect Taiwan’s effort to support families amid declining birth rates, by giving tangible tax relief. For eligible taxpayers, the changes offer meaningful savings—but require careful documentation, awareness of eligible expenses, and timely filing.