Taipei: The annual tax-deductible allowance for basic living expenses is anticipated to rise to NT$220,000 (US$6,870) per person for tax filers in 2027, as stated by the Directorate-General of Budget, Accounting and Statistics (DGBAS) on Friday.
According to Focus Taiwan, the DGBAS presented its 2025 household income and expenditure survey, highlighting that the median disposable income per capita reached NT$366,841, marking a 3.16 percent increase from the previous year. Based on this data, the tax-deductible allowance for basic living expenses per person is projected to be around NT$220,000 for income earned in 2026, reflecting a NT$7,000 rise from NT$213,000 in 2025.
The Taxpayers' Rights Protection Act, enacted in 2017, stipulates that the government should not tax the amount necessary for individuals to cover basic living costs, calculated as 60 percent of the median per capita disposable income from the preceding year. The Ministry of Finance (MOF) is expected to officially announce the precise figure for the adjusted tax-deductible allowance by the end of the year.
In Taiwan's tax system, if the basic living expenses allowance surpasses the total of the personal exemption, standard deduction, and special deductions available to all taxpayers, the excess can be deducted from the taxpayer's gross income. This allowance is particularly beneficial for households with children filing taxes, as single taxpayers and couples without dependents generally find the combined total of exemptions and deductions more advantageous.
PwC Taiwan family business and wealth succession services accountant Lee Nan-han noted that with the expected NT$7,000 increase in basic living expense deduction, a four-member family consisting of a married couple and two minor children could see their total deduction increase by NT$28,000. Lee further explained that this adjustment could lead to tax savings of NT$1,400 at a 5 percent income tax rate, NT$3,360 at a 12 percent rate, and NT$5,600 at a 20 percent rate.