Income tax is classified into individual income tax and profit-seeking enterprise income tax.

For any individual having income from sources in the Republic of China, the individual income tax shall be levied in accordance with this Act on his income derived from sources in the Republic of China.
Unless otherwise provided in this Act, in the case of an individual who is a nonresident in the Republic of China but who has derived income from sources in the Republic of China, income tax payable by him on all such income shall be withheld and paid at the respective sources.

For any profit-seeking enterprise operating within the territory of the Republic of China, the profit-seeking enterprise income tax shall be levied in accordance with this Act.
For any profit-seeking enterprise having its head office within the territory of the Republic of China, the profit-seeking enterprise income tax shall be levied on its total profit-seeking enterprise income derived within and without the territory of the Republic of China; however, in case income tax has been paid on the income derived outside of the territory of the Republic of China in accordance with the tax law of the source country of that income, such tax paid may, upon presentation by the taxpayer of evidence of tax payment issued by the tax office of said source country for the same business year and attested by a Chinese embassy or consulate or other organizations recognized by the Government of the Republic of China in the said local, be deducted from the amount of tax payable by the taxpayer at the time of filing final returns on the total profit-seeking enterprise income, to the extent that such a deduction shall not exceed the amount of tax which, computed at the applicable domestic tax rate, is increased in consequence of inclusion of its income derived from abroad.
For any profit-seeking enterprise having its head office without the territory of the Republic of China but having income derived from sources in the Republic of China, profit-seeking enterprise income tax shall be levied on its profit-seeking enterprise income derived within the territory of the Republic of China.

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Where the settlor of a trust deed is a profit-seeking enterprise and the beneficiary of the whole or any part of the trust benefit designated therein is not the settlor once the trust deed takes effect, then the said beneficiary shall include the value of his/her/its entitlement to such trust benefit in the aggregate amount of his/her/its annual income in the year the trust deed takes effect for assessment of income tax under this Act.
In the case of a trust deed referred to in the preceding Paragraph wherein the settlor is named as the beneficiary of the whole or any part of the trust benefit, if the beneficiary is replaced by a person other than the settlor during the term of such trust relationship, then the said new beneficiary shall include the value of his/her/its entitlement to such trust benefit in the aggregate amount of his/her/its annual income in the year the beneficiary change takes effect for assessment of income tax under this Act.
In the case of a trust deed wherein the settlor is a profit-seeking enterprise, if more trust property is added during the term of such trust relationship, so as to increase the right of a person other than the settlor to enjoy the trust benefit, then the said person shall include the increased portion of the value of his/her/its entitlement to such trust benefit in the aggregate amount of his/her/its annual income in the year the trust property increase takes effect for assessment of income tax under this Act.
Where the beneficiary or beneficiaries of a trust deed set forth in any of the preceding three Paragraphs are unspecified or not in existence yet, the trustee shall be considered as the taxpayer for that trust deed who shall declare and pay the tax for the value of the beneficiary's entitlement to such trust benefit in the year the trust deed takes effect, the year the change of beneficiary takes effect, or the year in which more trust property is added. The tax thereof shall be calculated in accordance with the prescribed withholding tax rate within the time limit stipulated in Article 71 of this Act. The aforementioned withholding tax rate shall be formulated by the Ministry of Finance (hereinafter referred to as the MOF) and submitted to the Executive Yuan for its approval and promulgation.

Where the trust property is transferred or otherwise disposed of based on transfer of trust relationship between the interested parties under any of the following circumstances, such transfer or disposition of trust property shall be exempt from assessment of income tax:
1. Between the settlor and a trustee, due to creation of the trust deed;
2. Between the original trustee and a new trustee, upon change of the trustee during the term of persistence of the trust relationship;
3. Between a trustee and a beneficiary, upon delivery of the trust property by the trustee pursuant to the intent of trust during the term of persistence of the trust relationship;
4. Between the settlor and the trustee or between the trustee and the beneficiary upon extinguishment of the trust relationship; or
5. Between the settlor and the trustee due to unsuccessful creation of, or invalidation, cancellation or nullification of the trust deed.
The income arising from management or disposition of the trust property by the trustee prior to transfer or disposition of the trust property to be effected under the preceding Paragraph shall be subject to assessment of income tax in accordance with the provisions of Article 3-4 of this Act.

With regard to the revenue, if any, derived from trust property, the trustee shall, in the year of derivation of such revenue and after deducting there-from the costs, necessary expenses and loss occurred, calculate the amount of each category of income as classified in this Act to be payable to each trust beneficiary; and each beneficiary shall include such portion of trust benefit distributed to him/her/it in his/her/its annual income tax return to be filed in the then current year for assessment of income tax under this Act.
Where there are two or more beneficiaries entitled to the trust benefit set forth in the preceding Paragraph, the trustee shall calculate the amounts of such revenue distributable to all beneficiaries in accordance with the benefit distribution proportions explicitly provided in the trust deed or the deduced proportions. However, if the distribution proportions are unknown or can not be deduced, then the revenue of various categories of such revenue derived from the trust property and distributable to trust beneficiaries shall be calculated on an average basis.
In the absence of specific or any beneficiary/beneficiaries, the tax payer for the amount of revenue derived from the trust property as calculated in the year of occurrence of such revenue under the preceding two Paragraphs shall be the trustee of the trust deed, and a withholding tax shall be paid at the applicable withholding rates and declared in the annual income tax return to be filed within the filing period stipulated in Article 71 of this Act. As for the withholding tax already declared and paid in accordance with the provisions of Paragraph 2, Article 89-1 of this Act, the amount of such withholding tax may be deducted from the amount of income tax payable by the tax payer. The withholding tax rates shall be formulated by the MOF and submitted to the Executive Yuan for its approval.
In case a trustee fails to comply with the provisions set out in the preceding Paragraphs 1 through 3, the tax authority shall assess the amount of income of the trust beneficiary concerned based on the relevant information available and levy the income tax accordingly.
With regard to the charitable trust conforming to the requirements set out in Article 4-3 of this Act, the trust benefits actually distributed to trust beneficiaries shall be included in their respective annual income for the year of such distribution for assessment of tax under this Act.
With regard to the mutual trust funds, securities investment trust funds, futures trust funds and/or other trust funds approved by the Financial Supervisory Commission, Executive Yuan under the acts, the trust benefits actually distributed to trust beneficiaries shall be included in their respective annual income for the year of such distribution for assessment of tax under this Act.

Income tax shall be exempted for the following categories of income:
1. (Deleted)
2. (Deleted)
3. Compensation for death or injury and that obtained in pursuance of the National Compensation Act;
4. Pension or compensation for death received in accordance with applicable laws or regulations by the bereaved family of a person who died in performing official duties. Pension or compensation for death in one lump sum or by installments received in accordance with applicable laws or regulations by the bereaved family of a person who died while not performing official duties with the lump sum or the total amount paid in all installments in one year calculated together with the amount of the Separation Income provided in Paragraph 1, Article 14 hereof; however, the total amount received shall not be more than the deductible amount provided in Category 9, Paragraph 1, Article 14 hereof;
5. Payment for special disbursement, allowance in kind or cash in lieu thereof and housing allowances received from the government by public servants, teachers, military personnel, policemen and laborers; and that portion included in the uniform-scale salary received by employees of state-run organizations representing allowance in kind and housing allowance;
6. Interest on savings of a compulsory nature made in accordance with laws or ordinance;
7. Compensation payment made under life insurance, labor insurance and insurance for public servants, military personnel and teachers;
8. Scholarships and subsidies granted by governments of the Republic of China, foreign governments, international institutions, educational, cultural, and scientific research organizations or associations, and other public or private organizations for encouragement of advanced studies, research or participation in scientific and professional training, except for the scholarships or subsidies received as the remuneration for services rendered to the grantors;
9. Income, derived by virtue of office, of foreign diplomatic officials, consular officials and other persons entitled to treatment accordable to diplomatic officials in the service of foreign embassies, legations and consulates in the Republic of China;
10. Income, derived by virtue of office, of employees, other than diplomatic officials, consular officials and persons entitled to diplomatic treatment, who, being nationals of a foreign country, are employed by the embassy, legation or consulate of their country or by subsidiary agencies thereof in the Republic of China; provided that reciprocal treatment is accorded by the foreign country concerned to employees of the nationality of the Republic of China employed by the embassy, legation or consulate of the Republic of China or by subsidiary agencies thereof, in the foreign country concerned.
11. Salaries paid by foreign governmental agencies, organizations or educational and cultural institutions to foreign technicians and professors of universities and colleges for services rendered within the territory of the Republic of China under technical cooperation or cultural and educational exchange agreements made by and between such foreign governmental agencies, organizations or educational and cultural institutions and those of the Republic of China;
12. (Deleted)
13. Income derived by educational, cultural, public welfare and charitable organizations or institutions and are in conformity with the criteria prescribed by the Executive Yuan, from the operations of their own and their subsidiaries;
14. Surplus profit of consumer cooperatives operated in accordance with law and doing no business with outsiders;
15. (Deleted)
16. Income earned by an individual or by a profit-seeking enterprise from the sale of land, or by an individual from the sales of apparel or furniture for household use, or income earned by a profit-seeking enterprise from the transactions of a sale of property for the purpose of stockpiling war materials in accordance with the regulations established by the government. The portion of stock or bond transactions income, earned by an individual or a profit-seeking enterprise through sale of stock or corporate bonds of companies limited by shares, attributable to changes in the valuation of said securities from date of acquisition to December 31, 1973.
17. Properties received by way of inheritance, bequest or gift, except properties obtained as a gift from a profit-seeking enterprise;
18. All kinds of income derived by governments of various levels;
19. Income of public utility enterprises owned by governments of various levels;
20. Business income obtained from the operation inside the territory of the Republic of China by a foreign enterprise engaged in international transportation; provided that reciprocal treatment is accorded by the foreign country concerned to an international transport enterprise of the Republic of China operating in its territory;
21. Royalties paid to a foreign enterprise for the use of its patent rights, trademarks, and/or various kinds of special licensed rights in order to introduce new production technology or products, improve product quality, or reduce production cost under the approval of the competent authority as a special case, as well as remuneration paid to a foreign enterprise for the provision of technical services in construction of a factory for an important productive enterprise determined and approved as such by the competent authority;
22. Interest derived from loans offered to the government of the Republic of China or legal entities within the territory of the Republic of China by foreign government or international financial institutions for economic development, and interest derived from the financing facilities offered by foreign financial institutions to their branch offices and other financial institutions within the territory of the Republic of China.
Interest derived from loans extended to legal entities within the territory of the Republic of China by foreign financial institutions for financing important economic construction projects under the approval of the MOF.
Interest derived from favorable-interest export loans offered to or guaranteed for the legal entities within the territory of the Republic of China by foreign governmental institutions and foreign financial institutions that specialize in offering export loans or guarantees;
23. Individual income derived from publishing articles, books, musical compositions, drama productions, drawing cartoons, and remuneration on an hourly basis for speeches. However, the total amount of such income for the whole year shall not exceed NT$ 180,000;
24. Various payments paid to personnel engaged in handling various kinds of examinations held by governmental agencies or academic organizations as commissioned by such agencies or engaged in handling entrance examinations held by public and private schools of various levels.
Criteria of "performing official duties" as referred to in Item 4 of the preceding Paragraph shall be stipulated by the Executive Yuan.

Income tax on gains derived from the securities transactions shall be suspended from January 1, 1990; and, at the same time, losses on such transactions shall not be deductible from the amount of income.

Income tax on gains derived from transactions of futures under the Futures Transaction Tax Act shall be suspended for the time being and losses on such transactions shall not be deductible from the amount of income.

Where a profit-seeking enterprise provides property for the purpose of formation of, or contribution to, or participation in any of the following charitable trusts, the value of the beneficiaries' entitlement to the benefits distributable to them under the said charitable trust shall be exempt from assessment of income tax and from application of the provisions of Article 3-2 and the proviso set out in Subparagraph 17, Paragraph 1, Article 4 of this Act:
1. A charitable trust, the trustee thereof is a trust business operator as defined in the Trust Business Act;
2. A charitable trust which will not pay special benefit in any manner to any specific person or any person who may be designated as a specific person, except for payment of the expenses which must be made to an enterprise incorporated in realizing the creation objective of the said charitable trust; and
3. A trust property which, according to the provisions of the trust deed thereof, will be transferred to a government authority at a specific level, or a charitable juristic person or charitable trust having a similar objective upon the cancellation, termination or extinguishment of such trust deed.

An individual or a profit-seeking enterprise who has any income derived from transactions of house, house and the share of land associated with the house, or any land which can be issued a construction permit (hereinafter referred to as the “house and land") acquired on or after January 1, 2016, shall be subject to assessment of income tax in accordance with the provisions of Articles 14-4 through 14-8 and Article 24-5 of this Act.
For an individual or a profit-seeking enterprise who acquires the right to use a house by creation of superficies or the presale house with its building location on or after January 1, 2016, the transactions of the right or the presale house with its building location shall be regarded as the transactions of the house and land in the preceding Paragraph.
For any individual or profit-seeking enterprise directly or indirectly holding more than half of the total number of shares or the total amount of capital of an enterprise within or outside the Republic of China, where at least 50% of the value of such shares or capital are constituted by house and land within the territory of the Republic of China, the transactions of the shares or capital shall be regarded as the transactions of the house and land as provided in Paragraph 1; however, such shall not apply if the shares being transacted are those of stocks in exchange-listed, OTC-listed, or emerging stock companies.
Land that meets the criteria of Paragraph 1 shall be exempt from application of Subparagraph 16, Paragraph 1, Article 4 of this Act; the house provided in Paragraph 1 shall exclude farmhouses built in accordance with the Agricultural Development Act.

House and land transactions mentioned in the preceding Article shall be exempt from assessment of income tax provided they comply with any one of the following conditions. However, for the house and land conforming to the provisions of Subparagraph 1, the amount of the exempt income calculated in accordance with Paragraph 3, Article 14-4 shall not exceed NT$4,000,000.
1. Self-use house and land held by an individual, his (her) spouse, or their minor children which complies with any one of the following conditions:
(1) The individual, his (her) spouse, or their minor children have lived in, maintained their household registration at the self-use house, and have owned the house for 6 consecutive years.
(2) The house and land have never been used for lease, business operation, or professional practice in the last 6 years before its sale.
(3) The individual, his (her) spouse, or their minor children have never applied for the provision of this subparagraph in the last 6 years before the sale.
2. Land that complies with the provisions of Article 37 or Article 38-1 of the Agricultural Development Act allowing for application for non-imposition of the land value increment tax.
3. Expropriated land and land improvements, including the price negotiation before the expropriation.
4. Transfer of land reserved for public facilities under the Urban Planning Law before the expropriation.
Land and improvements on land provided in Subparagraphs 2 to 4 shall be exempt from application of Article 14-5; related losses incurred from the transactions shall also be exempt from application of loss deduction provided in Paragraph 2, Article 14-4, loss deduction provided in Paragraph 3, Article 24-5, and loss deduction from the amount of income of the profit-seeking enterprise provided in the second part of Paragraph 4, Article 24-5.

The personal exemption for individual income tax shall be limited to NT$ 60,000 each person per year. If the total increase of the consumer price index has reached a figure of 3% or higher compared to the index of the year of previous adjustment, the exemption shall be adjusted accordingly. The adjusted amount shall be calculated in units of NT$100; if the amount is less than NT$1,000, it shall be calculated as a unit of NT$1,000 and rounded up or down to the nearest NT$1,000 using the traditional method.
The tax brackets and rates of individual income tax are as follows:
1. If the annual total net consolidated income is less than or equal to NT$520,000, the tax rate shall be 5%.
2. If the annual total net consolidated income is above NT$520,000 but not more than NT$1,170,000, the income tax payable shall be NT$26,000 plus 12% for the portion of income more than NT$520,000.
3. If the annual total net consolidated income is above NT$1,170,000 but not more than NT$2,350,000, the income tax payable shall be NT$104,000 plus 20% for the portion of income more than NT$1,170,000.
4. If the annual total net consolidated income is above NT$2,350,000 but not more than NT$4,400,000, the income tax payable shall be NT$340,000 plus 30% for the portion of income more than NT$2,350,000.
5. If the annual total net consolidated income is above NT$4,400,000, the income tax payable shall be NT$955,000 plus 40% for the portion of income more than NT$4,400,000.
If the total increase of the consumer price index has reached a figure of 3% or higher compared to the index of the year of previous adjustment, the tax brackets as described in the preceding Paragraph shall be adjusted accordingly. The adjusted amount shall be calculated in units of NT$10,000; if the amount is less than NT$10,000, it shall be calculated as a unit of NT$1,000 and rounded up or down to the nearest NT$10,000 using the traditional method.
The exemption and the tax brackets for individual income tax shall be publicly announced by the MOF in accordance with the preceding Paragraphs 1 & 3 before the beginning of each year. The consumer price index as indicated above shall be publicly released by the Directorate-General of Budget, Accounting and Statistics, Executive Yuan based on the average consumer price index for 12 months up to the end of October of the previous year.
The minimum taxable amount and rates for profit-seeking enterprise income tax are as follows:
1. If the total taxable income of a profit-seeking enterprise is NT$120,000 or less, the profit-seeking enterprise is exempt from tax.
2. If the total taxable income of a profit-seeking enterprise is more than NT$120,000, the income tax rate shall be 20%. However, the income tax payable shall not exceed one half of the portion of taxable income more than NT$120,000.
3. Where the total taxable income of a profit-seeking enterprise is more than NT$120,000 but not more than NT$500,000, the income tax rate shall be in accordance with the following provisions instead of the preceding Subparagraph. However, the income tax payable shall not exceed one half of the portion of taxable income more than NT$120,000.
(1) The income tax rate for taxable year 2018 shall be 18%.
(2) The income tax rate for taxable year 2019 shall be 19%.

The standard deduction, special deduction of income from salaries/wages and special deduction for the disabled or handicapped shall be handled in accordance with Article 17, and their respective calculations for adjustments shall apply mutatis mutandis to paragraph 1 and paragraph 4 of Article 5.
The deductions of paragraph 1 and the exemption of Article 5 shall be assessed every three years in accordance with the standard of income and changes in basic living standards.

All amounts of money as provided in this Act should be expressed in New Taiwan Dollars.

With regard to the property provided by any individual or profit-seeking enterprise for creating, or contributing to, or participating in a charitable trust conforming to the applicable requirements set out in Article 4-3, the provisions of Article 17 and Article 36 of this Act shall govern.

Separate accounting books and records shall be established and maintained for individual trust deeds by the respective trustees of such trust deeds for use in keeping the details of the receiving and disbursing transactions effected under each individual trust deed. Every disbursement transaction must be supported by appropriate certificate or receipt.

The term "person" as used in this Act refers to a natural person or juristic person. The term "individual" used in this Act means a natural person.
The term "individual residing in the Republic of China" refers to one of the following:
1. A person who has domicile within the territory of the Republic of China and resides at all times within the territory of the Republic of China;
2. A person who has no domicile within the territory of the Republic of China but resides within the territory of the Republic of China for a period of more than 183 days during a taxable year.
The term "individual not residing in the Republic of China" denotes an individual who does not fit the descriptions provided in the preceding paragraph.
The term "taxpayer" as used in this Act means a person who is required under this Act to report or pay income tax.
The term "tax withholder" as used in this Act means a person who is required under this Act to withhold income tax from his payment to be made to a taxpayer.

The term "income from sources in the Republic of China" used in this Act refers to income of the following categories:
1. Dividends distributed by companies incorporated and registered in accordance with the Company Act of the Republic of China and by foreign companies authorized by the government of the Republic of China to operate within the territory of the Republic of China;
2. Profits distributed by profit-seeking enterprises organized in the form of a cooperative or a partnership within the territory of the Republic of China;
3. Remuneration for services rendered within the territory of the Republic of China; however, this shall not apply to remuneration obtained from an employer without the territory of the Republic of China by an individual not residing in the Republic of China but staying in the Republic of China for a period of not more than ninety days during a taxable year;
4. Interest obtained from governments of various levels of the Republic of China, from juristic persons within the territory of the Republic of China and from individuals residing in the Republic of China;
5. Rental obtained from lease of property situated within the territory of the Republic of China;
6. Royalties obtained from patents, trademarks, copyrights, secret formulas and franchises by virtue of their being made available for use by other persons within the territory of the Republic of China;
7. Profits from the transaction of properties within the territory of the Republic of China;
8. Remuneration for services performed by personnel sent abroad by the government of the Republic of China on overseas missions and for services rendered abroad by employees in general;
9. Profits from operation of industry, commerce, agriculture, forestry, fishery, animal husbandry, mining, and metallurgy enterprises within the territory of the Republic of China;
10. Prizes or awards won from skills competitions or by chance, etc. within the territory of the Republic of China; and
11. Any other income obtained within the territory of the Republic of China.

The terms "income from the transaction of property" and "losses from the transaction of property" as used in this Act refer to profits and losses resulting from sale, purchase, or exchange of property by a taxpayer who comes to possess the property through a manner other than engaging in regular sales and purchases of such properties for profit-seeking purposes.

The term "fixed place of business" as used in this Act refers to fixed places for operation of business, including administrative offices, branch or sub-branch offices, business offices, factories, workshops, warehouses, mining fields, and construction sites, however, this shall exclude warehouse or storage sites used exclusively for purchase of goods and maintenance shops not used for processing or manufacturing products.
The term "business agent" as used in this Act means an agent fulfilling any of the following requirements:
1. Where the agent, in addition to representing its principal in the purchase of goods, is authorized to regularly represent the principal in making business arrangements and in signing contracts;
2. Where the agent regularly keeps in store goods of its principal and delivers the same, for its principal, to others; and
3. Where the agent regularly accepts, for its principal, order for goods.

The term "practitioner of profession" as used in this Act refers to a lawyer, certified public accountant, architect, technician, physician, pharmacist, obstetrician, author, broker, scrivener, artisan, performer, or any person who makes a living with craftsmanship or art.
The term "profit-seeking enterprise" as used in this Act refers to industrial, commercial, agricultural, forestry, fishing, animal husbandry, mining or metallurgical enterprises operated by public, private, or joint public and private interests and having a business name or place and organized in the form of sole proprietorship, partnership, company or in any other form of organization.
The term "public utility enterprise" as used in this Act refers to an organization established by a government of any level for the purpose of attaining certain objectives of a specific enterprise without computation of profit or loss and distribution of dividend.
The term "educational, cultural, public welfare and charitable organizations or institutions" as used in this Act denotes organizations or institutions that are organized in accordance with the provisions of the Book of General Principles of the Civil Code relating to public welfare organization and foundations or in accordance with the provisions of other relevant laws and ordinances and are duly registered with the competent authority.
The term "cooperative" as used in this Act refers to cooperatives which are organized in accordance with the Cooperative Act, duly registered with the competent authority at the place of their business, and conduct their operations in accordance with laws, however, an organization that is engaged in business of a cooperative nature, and fails to meet the requirements set forth herein, shall not be considered as a cooperative.
Ⅵ.The term "taxable year" as used in this Act where the individual income tax is involved shall commence on the first day of January and end on the thirty-first day of December of each year.

(Deleted)