LATEST NEWS:

Ann Yu

The China Post

Publication Date : 15-03-2013

Taiwanese couples may soon be allowed to file their income taxes separately as part of a draft amendment to the Income Tax Act.

At a cabinet weekly meeting yesterday, spokesperson Cheng Li-wen said that the cabinet decided on amending the act in consideration of some separated spouses who have suffered from domestic violence, as well as other reasons. In the future, couples may be eligible to file non-wage taxes separately, the cabinet said.

The new tax-file plan is slated to launch in 2014, which in rough estimation would decrease the government's taxes by NT$16.5 billion (US$554.6 million).

According to the Income Tax Act, the amount of tax levied on the salary income and a person's spouse can be calculated separately and then declared and paid jointly. As for non-wage income, couples are obliged to calculate the taxes of the combined income and declare the tax return together.

Cheng mentioned that the change was for the convenience of separated couples, who may find it difficult when it comes to filing taxes. “This is more of a human rights issue, which the cabinet wishes to acknowledge," she said.

According to the draft, couples can choose to file their taxes in one of three ways - by calculating the taxes on a combined income, by filing jointly on only the wage income, or filing completely separate taxes returns.

Citizens can choose to file taxes in any way that is more convenient for them, said the cabinet.

The amendment comes in reaction to a constitutional interpretation in 2012, which ruled that according to Income Tax Act 15, couples needed to aggregate all their non-wage income and file a combined tax return.

Cheng said that the cabinet suggested that this decision caused an imbalance of tax returns between married couples and single people, thus violating the constitution.

Premier Jiang Yi-huah commented that the amendments were to make sure the laws were subject to the constitution and that it ensured tax equity. He added that each ministry should engage in thorough conversation for the completeness of the law amendments.