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 following subparagraphs:
1. Income derived from sources outside the Republic of China and excluded from gross consolidated income, as well as income which is exempted in accordance with Paragraph 1, Article 28 of the Laws and Regulations Regarding Hong Kong and Macau Affairs. However, if the aggregate of these two sources of income in a tax household is less than NT$1,000,000, it may be exempt from inclusion in the basic income.
2. Insurance payment received by the beneficiary of a life insurance policy or annuity in which the beneficiary and the policyholder are not the same person, and the life insurance policy and annuity take effect after the coming into force of this Act. However, in the case of payment made upon the death of the insured person, the part of which the aggregate payment received by a tax household is equal to or less than NT$30,000,000 may be excluded from the basic income.
3. Income derived from transactions of the following types of securities:
(1)Stocks, certificates of entitlement to new shares, certificates of payment and documents demonstrating title to shares issued by or privately placed by companies not listed on a 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 have been incorporated for less than five years at the time of transaction.
(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 Income Tax Act and other laws.
5. The amount of income or deduction which leads to reduction, exemption, or deduction from the consolidated income tax as may be provided for by laws which may be publicly announced by the MOF after the implementation of this Act.
The calculation of income from securities transactions under Subparagraph 3 of the preceding paragraph shall be governed by mutatis mutandis Subparagraph 1 and Subparagraph 2 of Category 7 of 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. 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 both the year in which the loss is incurred and the year in which the deduction is claimed and only at the amount assessed by the tax authority.
For the purpose of auditing income derived from securities transactions under Subparagraph 3, Paragraph 1, the regulations governing the recognition of the transaction price, costs, and expenses of securities transactions, as well as the assessment of such in the case of a failure to file or a failure to present the actual transaction price or the original cost shall be promulgated by the MOF.
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 5, Paragraph 1, if a loss occurs, Paragraph 3 may apply mutatis mutandis if so publicly announced by the MOF.
Paragraph 2, Article 3 shall apply mutatis mutandis to the calculation for adjustment and public announcement for the amount prescribed in Subparagraph 2, Paragraph 1.
With regard to the high-risk innovative startups referred to in the proviso of Item 1 of Subparagraph 3 of Paragraph 1, the MOF and the Ministry of Economic Affairs shall together promulgate regulations to stipulate the scope of application, qualifications, the deadline to apply for approval, the application procedure, the documents for review, which authority to give the approval, and other related matters.
Subparagraph 1, Paragraph 1 shall come into force on January 1, 2009. However, if the Executive Yuan deems it necessary in consideration of the needs of economic development, it shall come into force on January 1, 2010.

If an individual and his or her related parties directly or indirectly hold 50% or more of the shares or capital of a foreign affiliated enterprise in a low-tax country or jurisdiction, or have a significant influence on such a foreign affiliated enterprise, and the foreign affiliated enterprise does not fall under any of the subparagraphs of Paragraph 1, Article 43-3 of the Income Tax Act, and the individual, either alone or with his or her spouse and relatives within the second degree of kinship, holds 10% or more of the shares or capital of the foreign affiliated enterprise, then the surplus earnings of the foreign affiliated enterprise shall be recognized as the individual's income from profit-seeking activities, which is calculated according to the individual's holding ratio of the shares or capital to the total shares or capital, aggregated with the income calculated in accordance with Subparagraph 1, Paragraph 1 of the preceding article, and included in the individual's basic income of the current year. However, if the aggregate income in a tax household is less than NT$1,000,000, it shall be exempt from inclusion in the individual's basic income.
The term "a low-tax country or jurisdiction" as mentioned in the preceding paragraph shall be determined in accordance with Paragraph 2, Article 43-3 of the Income Tax Act.
From the year in which the foreign affiliated enterprise meets the requirements of Paragraph 1, if the losses of each year incurred in the foreign affiliated enterprise have been duly audited and attested to in accordance with Paragraph 3, Article 43-3 of the Income Tax Act, filed by the aforementioned individual and assessed by the tax authority, such losses may be deducted from surplus earnings of the foreign affiliated enterprise within ten years following the year the losses occurred, and then the individual's income from profit-seeking activities shall be calculated in accordance with the provisions of Paragraph 1.
When the aforementioned individual receives the dividends or surplus earnings from the foreign affiliated enterprise, the remaining sum of the received amount after deducting the income from profit-seeking activities calculated in accordance with Paragraph 1 shall be included in the income of the receiving year calculated in accordance with Subparagraph 1, Paragraph 1 of the preceding article. However, the income from profit-seeking activities calculated in accordance with Paragraph 1 which was exempt from inclusion in the basic income shall not be deducted.
If the income tax on the income from profit-seeking activities provided in Paragraph 1 was paid in accordance with the tax law of the source jurisdiction in the receiving year, such tax paid may, upon presentation by the taxpayer of evidence of tax payment certificates issued by the tax authorities of said source jurisdiction and attested to by an overseas agency of the Republic of China or other organizations recognized by the Government of the Republic of China in the said locality, be credited against the amount of basic tax payable calculated in accordance with the forepart of Paragraph 1, Article 13, within five years from the date following the expiration date of the statutory period for filing the tax return in the year the income from profit-seeking activities is included into the basic income. The credited amount shall not exceed the amount of basic tax which is increased due to including such income from profit-seeking activities under regulations.
The regulations governing the scope of related parties, affiliated enterprises, a significant influence, calculation of the income from profit-seeking activities, 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 MOF.
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 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 of Paragraph 1 of Article 12, in accordance with the tax laws of the source jurisdiction of that income, such tax paid may be credited against the basic tax. The credited amount shall not exceed the amount of basic tax which, computed by the above mentioned method, is increased due to including 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 certificates issued by the tax authorities of the said source jurisdiction for the same tax year and attested to by an overseas agency of the Republic of China or other organizations recognized by the Government of the Republic of China in the said locality.
Paragraph 2, Article 3 shall apply mutatis mutandis to the calculation for adjustment and public announcement of the amount of the deduction prescribed in Paragraph 1.

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