The amount of regular income tax of an individual shall be the balance of the tax payable in accordance with Paragraph 1, Article 71 or Paragraph 1 or Paragraph 2, Article 71-1 of the Income Tax Act, after subtraction of his or her investment tax credits in accordance with the provisions of other laws.

The amount of basic income of an individual shall be the sum of the net taxable income as calculated in accordance with the Income Tax Act and the amount which is under the provisions of the following subparagraphs:
1. Income, which is derived from sources outside the Republic of China and is excluded from gross consolidated income, as well as income which is exempted in accordance with Paragraph 1, Article 28 of the Act Governing Relations with Hong Kong and Macau. However, if the aggregate of the two mentioned sources of income in a filing unit is less than NT$1,000,000, it may be excluded from the basic income.
2. Insurance payment received by the beneficiary of a life insurance policy or annuity in which the beneficiary and the proposer are not the same person and the life insurance policy and annuities are contracted after this Act coming into force. However, in the case of payment made upon the death of the insured person, the part of which aggregate of payment made in a filing unit is equal to or less than NT$30,000,000 may be excluded from the basic income.
3. Income derived from transactions of the securities on the following items:
(1)Stocks, certificates of entitlement to new shares, certificates of payment and documents of title to shares issued or privately placed by companies not listed on the stock exchange or traded on over-the-counter markets, except for those companies that have been approved by the central authority in charge of relevant enterprises as high-risk innovative startups and incorporated for less than five years.
(2)Beneficiary certificates of privately-placed securities investment trust funds.
4. The amount of non-cash donations or contributions which is deducted from the gross consolidated income in accordance with the provisions of the Income Tax Act and other laws.
5. The amount of income or deduction which is entitled to reduction, exemption or deduction from the consolidated income tax as may be provided by laws which may be promulgated after the implementation of this Act and thereafter announced by the Ministry of Finance.
The calculation of income on securities transactions under the provision of Subparagraph 3 of the preceding paragraph shall apply mutatis mutandis to Subparagraph 1 and Subparagraph 2, Item 7, Paragraph 1 of Article 14 of the Income Tax Act. The loss incurred from the mentioned securities transactions may be deducted from income derived from securities transactions performed in the same year. However, if no income or no sufficient income derived from security transactions in the same year is available for deduction, the loss may be carried forward for the next three years following the year of the loss. However, the claim of deduction of loss shall apply only to such income and loss as are calculated based on the actual transaction price and the original cost in the years in which the loss incurred and the deduction claimed and only to the amount which has been assessed and recognized by the collection authority.
For the purpose of auditing income derived from securities transactions under the provision of Subparagraph 3 of Paragraph 1, regulations governing the recognition of the price, costs and expenses of securities transactions, as well as the assessment of such in the case of failing to file or present the actual transaction price or the original cost shall be issued by the Ministry of Finance.
In the case of an amount of reduction, exemption or deduction which shall be added back to the base of the basic tax in accordance with Subparagraph 6 of Paragraph 1, and with the incurrence of a loss may apply mutatis mutandis to Paragraph 3 if publicly announced by the Ministry of Finance.
The calculation for adjustment and public announcement of the amount prescribed in Subparagraph 2, Paragraph 1 shall apply mutatis mutandis to Paragraph 2 of Article 3.
The scope and qualifications of the high-risk innovative startups, the application approval deadline, the application procedure, the authorities giving the approval, and other related matters under the exception of Item 1 Subparagraph 3, Paragraph 1 shall be stipulated collaboratively by the Ministry of Finance and the Ministry of Economic Affairs.
The provision under Subparagraph 1 of Paragraph 1 shall come into force on January 1, 2009. However, if the Executive Yuan deems it is necessary to postpone the implementation of the provision in consideration of the needs of economic development, the provision may come into force on January 1, 2010.

For any individual and his or her related parties directly or indirectly holding up to 50% of shares or capital of a foreign affiliated enterprise registered in a low-tax burden country or jurisdiction, or having a significant influence on such a foreign affiliated enterprise, and the foreign affiliated enterprise does not fall under the provisions of any of the Subparagraphs of Paragraph 1, Article 43-3 of the Income Tax Act, where the individual, himself or herself, with his or her spouse and relatives within the second degree of kinship holding up to 10% of shares or capital of the foreign affiliated enterprise, the surplus earnings of the foreign affiliated enterprise shall be recognized as the individual’s business income which is calculated according to the ratio of the holding shares or capital. Also, such income shall be aggregated with the income calculated in accordance with Subparagraph 1, Paragraph 1 of the preceding article and be included in the individual’s basic income of the current year. However, if the aggregate of the income in a filing unit is less than NT$1,000,000, it shall be excluded from the basic income.
The term "a low-tax country or jurisdiction" as mentioned in the preceding paragraph shall be in accordance with Paragraph 2, Article 43-3 of the Income Tax Act.
From the current year in which the foreign affiliated enterprise is in accordance with provisions of Paragraph 1, if the losses of each year incurred in the foreign affiliated enterprise have been duly certified in accordance with Paragraph 3, Article 43-3 of the Income Tax Act, then filed by the individual and verified by the tax authority, such losses may be deducted from surplus earnings of the foreign affiliated enterprise within ten years, and the business income of the individual shall be calculated in accordance with the provisions of Paragraph 1.
When the individual receives the dividends or surplus earnings from the foreign affiliated enterprise, the remaining sum of such dividends or surplus earnings deducting the business income calculated in accordance with Paragraph 1 shall be included in the income calculated in accordance with Subparagraph 1, Paragraph 1 of the preceding article of the receiving year. However, the business income calculated in accordance with Paragraph 1 which was excluded from the basic income shall not be deducted.
In case income tax on the business income provided in Paragraph 1 of the receiving year has been paid in accordance with the tax act of the source country, such tax paid may, upon presentation by the taxpayer of evidence of tax payment issued by the tax office of said source country and attested by an overseas agency of the Republic of China or other organizations recognized by the Government of the Republic of China in the said locale, be deducted from the amount of basic tax payable calculated in accordance with the forepart of Paragraph 1, Article 13 by the taxpayer within five years from the date following the expiration date of the statutory period for filing the tax return in the year of recognizing business income into the basic income; to the extent that such tax credit shall not exceed the amount of basic tax which, computed in accordance with the act, is increased in consequence of inclusion of such business income.
The regulations governing the scope of related parties, affiliated enterprises, a significant influence, calculation of the business income, the deduction of losses, and foreign tax credits; the relevant calculation method; required documents; and other requirements specified in the preceding five Paragraphs shall be prescribed by the Ministry of Finance.
If an affiliated enterprise specified in Paragraph 1 is subject to Article 43-4 of the Income Tax Act, it is not subject to the provisions of the preceding six Paragraphs.

The amount of basic tax of an individual shall be the amount of basic income as calculated in accordance with Article 12 and Paragraph 1 of the preceding article with a deduction of NT$6,000,000 and then multiplied by the tax rate of twenty percent. However, in the case where income tax has been paid on the income under Subparagraph 1, Paragraph 1 of Article 12, in accordance with the tax laws of the source country of that income, such tax paid may be credited against the basic tax, to the extent that such tax credit shall not exceed the amount of basic tax which, computed by the above mentioned method, is increased in consequence of inclusion of such income.
When a taxpayer applies for tax credit as described in the preceding paragraph, he or she shall present the evidence of tax payment issued by the tax office of the said source country for the same assessment year and attested by an overseas agency of the Republic of China or consulate or other organizations recognized by the Government of the Republic of China in the said locality.
The calculation for adjustment and public announcement of the amount of the deduction prescribed in Paragraph 1 shall apply mutatis mutandis to Paragraph 2 of Article 3.

In the case where a taxpayer, as well as his or her spouse and/or dependents who shall file a joint consolidated income tax return in accordance with the Income Tax Act, has an amount of income or deduction which is covered within the provisions of any of the Subparagraphs of Paragraph 1 of Article 12 and Paragraph 1 of Article 12-1, the taxpayer shall include any such amount in his or her return for the calculation of basic income.