Estate and gift taxes are levied on the worldwide assets of Taiwanese nationals who regularly reside in Taiwan. On the other hand, Taiwanese nationals who regularly reside outside territory of Taiwan, and those who are not Taiwanese nationals are subject to estate and gift tax to the extent of assets within territory of Taiwan. The meaning of aforementioned "regularly reside in Taiwan" refers to those who have domicile in territory of Taiwan within 2 years before the inheritance event or gift event, or those who do not have domicile in territory of Taiwan within 2 years before the inheritance event or gift event, but have residence within territory of Taiwan, and stay in territory of Taiwan for over 365 days within 2 years before the inheritance event or gift event.
Taxpayers of the estate tax are, in order of priority: the executor of the will, heir(s), legatee(s) or administrator of estate. Estate tax is calculated based on the prevailing value of taxable assets on the date of death, less exemptions and deductions. For inheritance events taking place, an exemption of NT$13,330,000 per estate tax return for each taxpayer, and deductions regulated by Estate and Gift Tax Act are allowed. In addition, if a decedent investing in Taiwan qualifies for Preferential Estate Tax on Investment by Overseas Chinese, the audited part of the investment can be valued based on the fair market value of assets. In that case, only 50% of the investment value is taxed.
The formula for calculating the estate tax is:
(Taxable Estate Amount - Exemption - Deductions) × Tax Rate - Progressive Difference - creditable tax and interest = Estate Tax Payable
| Tax Brackets (NT$) | Tax Rate | Progressive Difference (NT$) |
|---|---|---|
| 50,000,000 or under | 10% | 0 |
| 50,000,001-100,000,000 | 15% | 2,500,000 |
| Over 100,000,000 | 20% | 7,500,000 |
The donor is generally the taxpayer of the gift tax. Gift tax is calculated based on the fair market value of the taxable assets on the date of transfer, less exemptions and deductions. For gift events taking place, an exemption of NT$2,440,000 per taxpayer annually is allowed. In addition, gifts such as donations by givers to the government, public schools, non-profit organizations, government-owned shares from public enterprises, religious groups and charitable organizations are exempt from the gift tax.
The formula for calculating the gift tax is:
(Taxable Gift Amount - Exemption - Deductions) × Tax Rate - Progressive Difference = Gift Tax Payable
| Tax Brackets (NT$) | Tax Rate | Progressive Difference (NT$) |
|---|---|---|
| 25,000,000 or under | 10% | 0 |
| 25,000,001-50,000,000 | 15% | 1,250,000 |
| Over 50,000,000 | 20% | 3,750,000 |
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