Taiwan Tax Incentives for People with Mental and Physical Disabilities

Income tax calculation year: 2023. The following calculations are based on the 2023 income tax brackets. The basic concepts are the same, but the amounts may be adjusted annually.

1. Living Allowance

Reference: Regulations for Issuing Living Allowance for People with Disabilities - Laws & Regulations Database of The Republic of China

1.1 Subsidy Amount

Income Qualification	Level	Monthly Subsidy Amount
Low-income households	Severe, Very Severe, and Moderate disabilities	8,200
Low-income households	Mild disabilities	4,700
Lower-middle-income households	Severe, Very Severe, and Moderate disabilities	4,700
Lower-middle-income households	Mild disabilities	3,500
Others	Severe, Very Severe, and Moderate disabilities	4,700
Others	Mild disabilities	3,500

The subsidy amount is adjusted every 4 years starting from 2012. The central competent authority will announce the adjustment based on the growth rate of the consumer price index of the most recent year published by the central budget, accounting and statistics agency compared to the consumer price index of the year preceding the previous adjustment. However, if the growth rate is zero or negative, no adjustment will be made.

1.2 Application Conditions

Actually residing in the municipality or county (city) of household registration.
Resided in the country for more than 183 days in the past year.
Not placed in institutions for night-time or full-day accommodation services subsidized by the government.
Meets one of the following requirements:
- (1) Low-income households.
- (2) Lower-middle-income households.
- (3) Total family income and property meet the following criteria:
  1. The amount of total family income distributed equally to the whole family population does not reach 2.5 times the minimum monthly living expense per person for the current year, and does not exceed 1.5 times the average monthly consumption expenditure per person in the Taiwan area.
  2. The total value of all deposit principal and securities of the population that should be calculated in the total family income does not exceed NT$2 million for one person, and increases by NT$250,000 for each additional person.
  3. The total value of all land and houses of the population that should be calculated in the total family income does not exceed 2 times the real estate limit for Taiwan Province announced by the central competent authority under Article 4, Paragraph 1 of the Public Assistance Act. However, this does not apply to special circumstances approved by the central competent authority upon request by the competent authority of the municipality or county (city).

1.3 Suspension Conditions

The subsidy recipient dies.
The subsidy recipient is placed in an institution for night-time or full-day accommodation services subsidized by the government.
The family economic status of the subsidy recipient has improved.
The living allowance is not truly used for the care of the subsidy recipient.
The subsidy recipient is conscripted for military service or alternative service.
The subsidy recipient is imprisoned, detained for a case, or legally confined.
The subsidy recipient is missing and has been reported to the police for assistance in searching for more than six months.

2. Consolidated Income Tax

Applicable to the taxpayer, spouse, or dependents

Holders of a Disability Manual or a copy of a doctor’s diagnosis certificate, regardless of the level, can deduct 207,000 per person per year. A Catastrophic Illness Card cannot be used as a substitute for a copy of the Disability Manual.

If applying for disability status for the “first time” in the current year, pay special attention.

The National Taxation Bureau will have the list of people with disabilities from the Social Welfare Bureau, and the disability deduction will be automatically included. However, the data update might not be real-time enough, leading to omissions when the government calculates the tax amount. Remember to file manually and attach a copy of the disability qualification to the National Taxation Bureau.

2.1 Impact of Disability Consolidated Income Tax Incentives on Receiving Disability Living Allowance

The condition for the subsidy is calculated based on “total family income/property”. According to Article 5 of the Public Assistance Act, the definition of “whole family” should include: spouse, lineal blood relatives of the first degree, other lineal blood relatives in the same household or living together, and taxpayers who claim the person as a dependent for the consolidated income tax exemption.

Suppose A (Xiao Wang) is a person with a disability, and B (Lao Wang) lists A (Xiao Wang) as a dependent. B (Lao Wang) enjoys the "Disability Deduction of 207,000", but B (Lao Wang) will be calculated into A (Xiao Wang)’s “total family income”. Therefore, when the total family income/property becomes higher, it is possible that the person with disabilities A (Xiao Wang) will not meet the conditions for receiving the living allowance, resulting in a situation where the loss outweighs the gain, so pay special attention.

3. Vehicle License Tax

Vehicles with a cylinder displacement lower than 2,400cc are exempt from tax for people with disabilities. For those higher than 2,400cc, the portion exceeding the amount is taxable.

3.1 Application Conditions

Documents to be attached
- (1) People with disabilities holding a driver’s license (the vehicle owner must be the person with disabilities): Disability Manual or proof.
- (2) People with disabilities not holding a driver’s license (the vehicle owner must be the person with disabilities, spouse, or second-degree relative in the same household): Disability Manual or proof.
Limited to 1 vehicle per person with disabilities.
Expired Disability Manuals or proofs will not be accepted.

4. Estate Tax: Disability Deduction

If the heir is “severely disabled” or “a severe patient with mental illness”, an additional 6.18 million deduction can be claimed per person. However, if the heir waives the inheritance, the deduction cannot be claimed.

If the deceased person themselves was disabled, there are currently no incentives in the tax law.

Comparison of Consolidated Income Tax and Estate Tax

Item	Consolidated Income Tax	Estate Tax
Level	Any level	Severe disability or above only
Applicable Subjects	Taxpayer, spouse, dependents	Heir is the spouse, children, lineal descendants, parents, etc., of the deceased
Proof Documents	Disability Manual, copy of doctor’s diagnosis certificate	Disability Manual, copy of doctor’s diagnosis certificate
Others	Catastrophic Illness Card cannot be used as a substitute for a copy of the Disability Manual	Not applicable if the heir waives the inheritance
Amount	`207,000` per person per year	`6,180,000` per person